A new study from Juniper Research has found that the value of instant payments, where transactions are completed within ten seconds, will reach $18 trillion in 2025, up from $3 trillion in 2020; a growth of over 500%. This represents 17% of all B2B and consumer digital money transfer and banking payments by value in 2025.
The research found that West Europe is driving innovation and will account for 38% of instant payment transaction value by 2025.
The report identified that success of domestic instant payment schemes will enable cross-border vendors to connect different schemes into cross-border networks, which will radically reduce the time, cost and frustration involved in the current cross-border payments ecosystem. However, this will also require established cross-border vendors to revisit their business models, as the fundamentals of the market change drastically.
US Lagging Behind in Instant Payments Adoption
The new research, Instant Payments: Domestic & Cross-border Analysis and Forecasts 2020-2025, found that the US will trail in terms of instant payments adoption, with only an 8% share of global instant payment transaction values in 2025. While RTP has been available in the US for some time, the fragmented nature of its financial system means that adoption has been slow to date.
Research author Nick Maynard explains:
‘With the proposed FedNow service from the US Federal Reserve not coming into service until 2023/24, the US is rapidly falling behind in instant payments. Payments vendors must concentrate on creating innovative digital payments products to bridge this gap or be faced with an outdated system.’
B2B Instant Payments Dominating Transaction Values
The research found that B2B payments will dominate values in the instant payments market; accounting for 89% of global transaction values in 2025. While consumer payments are numerous, B2B payments have much higher average values. The research identifies that instant payments adoption can be particularly transformative in B2B payments, where value-added capabilities, including automation and additional remittance data enabled by ISO 20022 can be valuable in tackling complex accounts payable processes.
Juniper Research provides research and analytical services to the global hi-tech communications sector; providing consultancy, analyst reports and industry commentary.