A new research paper by SWIFT assesses the global real-time retail payments systems (RT-RPS) landscape, provides analysis on the key drivers and trends, and identifies the different approaches, barriers to entry and critical success factors.
The paper, entitled ‘The Global Adoption of Real-Time Retail Payments Systems’ highlights two key interlinked themes; the variety of different adoption speeds and the relationship with core drivers which are leading to the adoption of such systems:
RT-RPS growth is strong, but countries are adopting a variety of approaches which affects the rate of progress
- Numerous countries have undergone rapid adoption, typically as a result of the lead role that regulators have played in encouraging the market to migrate, coupled with the use of relatively new technology and supplemented with attractive pricing or incentives;
- Other countries are on a slower adoption path, typically where the regulator did not play a prominent role and/or the banking community showed little appetite; and
- The remaining systems are on a ‘typical’ adoption path, between the two extremes, usually characterised by active regulatory participation but where the systems were launched more than a decade ago and use older technology.
Regulatory initiatives are proving to be the key driver behind the increased adoption of RT-RPS
- The results show that the primary driver (73%) for RT-RPS adoption is the impact of regulatory reform. This comprised a number of factors, such as consumer protection, reduced credit risk, transparency, financial inclusion, fostering of competition, and wider macroeconomic impacts.
- The secondary driver (27%) for RT-RPS adoption is the impact of the banks’ commercial needs – both in responding to customers’ expectations, and/or responding to competitive threats from new entrants.
“The emergence of real-time payment services is having a transformational impact on underlying payment systems,” says Juliette Kennel, Head of Market Infrastructures at SWIFT.
“Real-time is a growing trend led by consumer expectations, supported by regulatory reform. Different countries have implemented real-time retail payment systems in different ways, ranging from simply adapting current legacy infrastructures to deal with real time, up to building brand new innovative systems, as we are seeing in Australia. Legacy and new models will need to co-exist both at a domestic and cross-border level, so, for banks, interoperability will be key. The industry is going to have to come up with ways to enable banks to offer real-time capabilities while keeping costs in check. Collaboration and innovation is going to be key.”