Real-time Payments: Enabling Transformation in APAC and MEA

A look at the unprecedented growth in the adoption of realtime payments in Asia Pacific (APAC) and Middle East/Africa (MEA) regions, and how they are reshaping the way businesses, governments and individuals interact with money.

With governments and regulators around the world now actively championing real-time payments, revolutionary changes are underway throughout the world’s payments ecosystems to achieve global financial inclusion.

Leveraging data from 28 countries, a report from ACI Worldwide reveals that by 2028, an expected 167.2 million people previously excluded from the financial system worldwide will no longer be unbanked.

But this massive growth in the adoption of realtime payments is not happening in the world’s most prosperous countries, where you’d expect.

In fact, it’s occurring in the countries with the highest levels of unbanked and underbanked consumers in the world - the APAC and MEA regions.

Source: Real-Time Payments: Economic Impact and Financial Inclusion

APAC: The world’s fastest growing real-time payments market

It’s the countries with the largest populations - predominantly cash economies, low credit usage and poor financial inclusion that stand to benefit the most. And it’s these countries that have been spearheading the adoption of real-time payments for everyday use.

Overall, Asia Pacific processed 185.8 billion real-time payments in 2023.

INDIA: World leaders in real-time payments adoption.

With nearly a quarter of all transactions in the region made in real time, the Asia Pacific region has become the world’s largest real-time payments market.

While the other APAC countries maintain a steady pace of instant payments, India’s United Payments Interface (UPI) handles more digital transactions than any other system in the world.

This highlights India as the world’s largest real-time player, having handled 129 billion transactions in 2023.

UPI was developed by National Payments Corporation of India (NPCI), established by the Reserve Bank of India (RBI) and the Indian Banks Association.

With demonetization mandates and making the system available to non-bank players, it’s now accessible across 500 banks.

This wide-ranging reach has driven the volume of realtime payments up by 44.6% from 2022 to 2023 and it now constitutes 84% of India’s electronic transactions.

Fintech apps are now the source of more than 95% of UPI transactions, and 91% of Indians use a mobile wallet, giving them a simple and convenient way to access real-time payments.

Source: Prime time for real-time global payments report

Domestic real-time meets cross-border

Additionally, India’s UPI is poised to form alliances with four other Asian central banks; Malaysia, Thailand, Singapore, and the Philippines, to establish an instant cross-border retail payments platform by 2026.

MALAYSIA: Unifying systems for a real-time transformation

Malaysia’s government and central bank, have worked together to harmonize the nation’s payments structure and ensure a seamless experience for all stakeholders.

By opening the ecosystem to fintechs and vertical businesses, its national payments network and central infrastructure, Payments Network Malaysia (PayNet) continues to consolidate and unify services.

This is instrumental in driving real-time payments expansion and enabling instant cross-border payments.

Malaysia continues to be one of southeast Asia’s most dynamic economies, and PayNet’s implementation of DuitNow, their Real-time Retail Payment Platform (RPP) is driving the country’s real-time transformation.

Using DuitNow, residents of Malaysia can now carry out immediate money transfers between online banks, digital wallets, merchants and peers by using a QR code, mobile number or identification number.

In 2023, 1.872 billion real-time payments were made in Malaysia, with a value of more than US$517 billion – and surpassing much larger economies.

Source: Prime time for real-time global payments report

Prediction: Malaysia’s real-time payments will double in the next five years

At the moment, nearly 1 in four (21.1%) of non-paper transactions in Malaysia are now real-time payments but as most of these are low-value P2P transactions, real-time payments represent only a 7.4% share of Malaysia’s transaction value. Rising thresholds and cross-border payment linkages are expected to change this.

With the five-year forecast reporting an 18.6% CAGR, the value of real-time payments could double to US$1.211 trillion by 2028.

INDONESIA: Climbing the charts in real-time payments

Indonesia’s BI-FAST is one of the world’s largest and most modernized real-time payment initiatives, incorporating 135 banks, multi-tenant aggregators, and non-bank participants.

While other countries have had to overcome the burdens of legacy payment infrastructures, Indonesia has been able to take on ISO 20022 seamlessly, creating a diverse, and universally adaptable real-time ecosystem.

Indonesia launched its first real-time payments system BI-FAST, owned and regulated by Bank Indonesia, in December 2021. As a later participant, it was able to learn from the real-time journeys of other countries, and was live in nine months.

Indonesia is now ranked as #8 in the world’s top 10 fastest-growing real-time payment markets, with almost 2 billion real-time payment transactions in 2023 and a CAGR of 44.6% (2023-2028).

The country has also surpassed more mature neighbors to become #3 in Asia Pacific for real-time payments volume, share and growth. By 2028, it is expected that real-time payments will account for 13.1% of all transactions in Indonesia.

Source: Prime time for real-time global payments report

Just three years into its real-time journey, Indonesia is a classic example of the successful collaboration of technology partners and central support in accelerating real-time adoption.

Indonesia is already linked to Malaysia, Thailand, Singapore and India in cross-border payments adoption. Further planned payment corridors will sustain Indonesia as the powerhouse of the Southeast Asian economy.

THAILAND: Aiming for financial inclusion

With 20.4 billion transactions in 2023, Thailand is the world’s third- largest real-time payments market, behind India and Brazil.

PromptPay, Thailand’s real-time payments system launched in 2016 with the primary goal of reinforcing financial inclusion in the country.

For the first time on record, real-time payments accounted for a 43.2% share of total payments volume in 2023, making it the most popular payments tool in Thailand, and overtaking paper-based payments. The share of real-time payments volume is expected to continue to grow at a CAGR of 10% between 2023 and 2028.

In a global context, considering its maturity, this makes Thailand a below-average growth market.

By 2028, real-time payments are expected to exceed a 50% share of total payments.

PAKISTAN: Set to benefit from financial inclusion

The economy with the most potential to benefit from real-time payments adoption over the next few years is Pakistan.

The State Bank of Pakistan’s Raast real-time payment method went live in 2021, and by 2028, it’s expected that Pakistan will provide banks with a profit potential of $173 billion, based on the estimated value of financial inclusion.

Until now, Pakistan’s low level of electronic transactions were due to small banking penetration – and lack of trust and awareness of digital payment methods. Adding this to limited interoperability, difficult accessibility and high cost of transactions, Pakistan provided instant payment settlements for large value and corporate transactions only. Raast will facilitate retail payment settlements with much greater efficiency.

THE MIDDLE EAST: Real-time payments building an inclusive and innovative financial system

Real-time payments are bringing about transformative change throughout the financial sector of the Middle East.

The region has vehemently embraced technology and used it to accelerate cultural adaption and economic reinvention, centered around real-time payments.

All six Gulf Cooperation Council (GCC) states now operate a real-time payments program as part of a government drive towards a cashless and financially inclusive society.

Traditionally a predominantly cash-oriented culture, more than half of the total transactions in the region in 2023 were electronic, thanks to the Middle East’s digital transformation journey. This accounted for 95% of total transaction value.

Last year marked a significant milestone as Oman, Kuwait and Qatar each launched their national realtime payment schemes, joining the more established regional players such as Saudi Arabia, Bahrain and the UAE.

With all six GCC member states now running real-time payment programs, transaction value in the Middle East is projected to rise from US$230 billion in 2023 to US$903 billion by 2028.

UNITED ARAB EMIRATES: Embracing payments innovation

With the UAE about to enter a fintech revolution, cutting-edge financial technologies have enabled a flood of innovation, propelling towards the forefront of the global payment industry.

The UAE’s rising status as a global business hub means that cross-border and real-time payments are integral to the UAE’s economy, given the country’s significant expatriate population.

The UAE-India remittance corridor is the second largest in the world (after the US-Mexico corridor), and stands as a prime example of how critical efficient cross-border payment systems are to the region.

The Central Bank of the UAE launched a new instant payments platform, Aani, in October 2023, enabling users to make payments to mobile numbers and use QR codes at physical points of sale.

The UAE also plans to roll out a national Instant Payment Platform (IPP) that will allow for 24/7 processing of payments.

KUWAIT: The rapid rise of digital transformation

The National Bank of Kuwait (NBK) launched their instant payment service (WAMAD) in June 2024.

Overseen by the Central Bank of Kuwait, WAMAD has significantly increased the national payment structure’s capabilities by greatly simplifying money transfers, and providing a secure platform for customers to manage their money at any time.

Designed to be fast, simple and secure, transactions are carried out using recipients’ mobile numbers.

The system was introduced to enhance the national payment infrastructure, provide a safe and advanced payment option, and accelerate digital transformation in Kuwait’s financial sector.

OMAN: Enhancing the quality of payment system services

The Central Bank of Oman (CBO) launched their national Real Time Gross Settlement System (RTGS) in June 2023.

Operating on a 24/7 basis, the new system aligns with the Central Bank of Oman’s vision of enhancing the quality and efficiency of national payment services across the baking, financial and general population in Oman.

The system improves the liquidity management mechanism and mitigates risk by enabling participants to monitor their liquidity status in real time, 24/7.

BAHRAIN: A leader in the region

Real-time payments in Bahrain are projected to surge from $352 million in 2023 to $1.5 billion by 2028, placing Bahrain among the most developed real-time payments markets in the Middle East.

Almost half of Bahrain’s 1.5 million residents are foreigners – 75% of whom are laborers. The increased financial inclusion spurred by real-time payments is helping Bahrain follow through on its Wages Protection System, established in 2021.

Under the law, employers must pay workers through real-time digital bank accounts, linked through the Benefit Company, which is Bahrain’s nationwide electronic payments network. Now, all payroll is recorded, which protects workers and ensures proper taxation.

QATAR: Financial inclusion through expanding electronic payments

The FAWRAN instant payment service was launched by The Qatar Central Bank (QCB) on 7th March 2024.

One of the most recent members of the GCC to adopt real-time payments, the new service will facilitate quicker financial and commercial transactions in Qatar, between individual and company bank accounts.

The new system allows bank customers to send and receive money in the country in minutes using alternative identifiers, such as a unique alias name or mobile number, instead of an IBAN.

Qatari banks will implement the service via mobile banking applications and digital channels. Currently, Qatar National Bank, Commercial Bank, Qatar Islamic Bank, Ahli Bank, Dukhan Bank and Doha Bank are among those offering the service, with others to follow soon.

FAWRAN is a key element of the project aligned with the country’s Third National Development Strategy aimed at improving Qatar’s payment system and transitioning the country to a cashless society.

Source: Real-Time Payments: Economic Impact and Financial Inclusion

AFRICA: Youth-driven real-time payments modernizing national economies

Africa is emerging as another one of the world’s fastest growing markets for real-time payments adoption.

This shift is not only boosting economic growth but also enabling more people to participate in the formal economy.

The modernization of payments is happening across the continent, with entrepreneurs, fintechs, financial service providers, and central banks reshaping the payments landscape with innovative financial services and digital solutions. These sweeping changes are set to benefit not only consumers and businesses, but ultimately, national economies.

Africa’s youthful population is the largest of any continent, with a median age of around 20 years - and 40% of its 1.5 billion people being 15 years old or younger.

With technological advancements being widely embraced by most African nations, the financial inclusion uplift from the introduction of real-time payments, suggests that Africa may benefit more than other regions.

AfricaNenda, the World Bank, and the UN Economic Commission for Africa launched the second edition of the State of Inclusive Instant Payment Systems report that explores fast/instant retail payments and highlights the challenges and opportunities shaping Africa’s payment landscape.

Source: Real-Time Payments: Economic Impact and Financial Inclusion

For both AfricaNenda and the World Bank, inclusivity is pivotal in shaping payment systems that cater to diverse needs.

With their respective initiatives, AfricaNenda and the World Bank are committed to supporting African Nations and regional bodies to shape a future where FPS/IPS are inclusive, accessible, and instrumental in widening financial inclusion across the continent.

More than half of all countries in Africa already have an instant payment system that allows every person, business, or government entity to transfer money to each other, no matter which bank or financial service provider they use. The aim is to make this possible in every African country by 2030.

Source: Real-Time Payments: Economic Impact and Financial Inclusion

What’s driving the success of RTP?

Real-time payments solve real-time challenges – they reduce costs and improve liquidity for businesses, help banks achieve greater efficiency and bring greater financial inclusion for individuals.

ACI’s fifth annual Prime Time for Real-Time report delves into the real-time payments landscape and identifies the factors that will fuel its growth over the next decade.

Active collaboration

Real time payments systems are thriving because of the active collaboration between governments, financial institutions, and payment service providers who work with merchants and third-party stakeholders to create and run successful real-time payment ecosystems.

Inclusive and open payment ecosystems

Larger banks are becoming more aware of the significant role that fintechs and smaller financial institutions have already played in driving real-time payments systems into the world’s leading markets. To remain competitive, they’re now entering into new partnerships with fintechs, creating transaction volume and value scale.

Building merchant incentives

To facilitate growth, merchant adoption of new realtime payment systems is crucial. India’s government has taken this on board by removing merchant discount rates and providing all merchants with QR codes for easy UPI acceptance.

Mass adoption by consumers and businesses

The convenience of being able to pay in real time by QR codes, online accounts or mobile apps is not only about speed, but transparency and precision. For merchants it can improve cash flow, and significantly cut costs, by eliminating a payment card intermediary.

Instant and affordable remittances

Real-time payments have transformed the remittance landscape by providing a cheaper and faster alternative to traditional transfer methods.

This is especially impactful in APAC and Middle Eastern countries where remittances form a significant part of household income. For example, workers in Singapore or Malaysia can send funds instantly to family members in countries like the Philippines or Indonesia.

Fintechs: A pivotal role in financial inclusion

Real-time payments are made possible by combining advanced technologies that ensure safe, secure instant transaction processing within a robust infrastructure.

Using Application Programming Interfaces (APIs), fintech companies, banks and other financial service providers can integrate RTP capabilities into their existing systems.

A Fintech-rich ecosystem drives real-time overlay services, apps and digital wallets, and contribute significantly to the improvement in speed and efficiency of payment systems.

Fintechs have played a pivotal role in promoting financial inclusion, particularly in some of the developing countries we’ve mentioned.

Traditional banking systems often exclude large segments of the population, especially those in rural areas or with low incomes. Fintechs have helped to bridge this gap by providing accessible and affordable financial services through mobile devices and the internet.

The significance of real-time payment monitoring

With any new technology, the ability to easily understand performance and unlock actionable insights is vital to success.

This is where real-time payment monitoring comes into play, alleviating pain points and providing banks, financial institutions and businesses with a competitive advantage in several ways.

Customer experience

An unsatisfactory customer experience is no longer unacceptable.

With so many options in the market, if a customer receives subpar service from your organization, they can (and will) easily take their business elsewhere.

Real-time payment monitoring enables businesses to ensure transactions are processed swiftly and accurately, every time. In a customer-centric era, delivering a seamless payment experience is essential for retaining and attracting clients.

Operational efficiency

With so many moving parts to manage, it can cost businesses a lot in time, money and resources to keep their environments running optimally, while incorporating new technologies.

Businesses can streamline their operations by gaining real-time visibility into payment processes. This leads to quicker, better-informed decision making, reduced operational costs, and improved resource allocation.

Reputational protection

In the world of payments, downtime is probably the most damaging issue to deal with. If your customers can’t transact, it can lead to negative publicity, regulatory scrutiny, and damage to your brand which can be hard to recover from. Monitoring means you can detect bottlenecks faster and fix them before they impact your customers.

Unlocking essential insights and analytics

Monitoring real-time payments is not a choice but a necessity for any organization aiming to stay competitive in the payments industry, particularly in dynamic and emerging markets like APAC, the Middle East and Africa.

The need to leverage actionable, real-time payment insights has never been greater. Analytics help to increase understanding of customer segments, and track key performance indicators.

Monitoring provides granular insights on issues, by deep-diving into rich payments data.

The economic benefits of real-time payments are clear incentives for businesses to embrace RTP solutions, but without stringent monitoring processes in place, these systems are exposed to threats.

Businesses that leverage real-time payment insights are well-positioned to thrive and contribute to the country’s economic growth.

Managing real-time payments complexity

Real-time payments are becoming more and more crucial for managing liquidity and working capital for businesses in less prosperous countries.

They’re providing financial inclusion for the unbanked and underbanked, and have asserted their role as a powerful enabler for societal transformation.

They boost economic growth, deliver a shift to a more formalized economy, and improve the efficiency of financial systems.

Real-time payments bring greater financial prosperity for individuals, help to solve real-world issues, and deliver real-life advantages that provide potentially limitless economic benefit.

But there are complexities that must be managed in order for these benefits to be realized.

Real-time payments mean that funds should be available in the recipient’s account within seconds.

When these expectations and SLAs are not met, organizations can face penalties, reputational damage, or even loss of business.

Managing real-time payments is not just about monitoring, troubleshooting and addressing customer-impacting issues, but also about missed revenue opportunities within the payments ecosystem.

IR’s Real-Time Payments solution provides a single dashboard to streamline the complexity of managing real-time payments.

With a holistic monitoring solution for your payments systems in place, like IR Transact, can keep organizations keep ahead of emerging technologies and the competition.

IR Transact enables you to:

Identify Payment Trends & Patterns - Quickly identify trends and patterns in your payments data to inform strategic decisions that increase revenue.

Deliver Business Results - Ensure customer payments are accepted successfully to deliver business results and maximize the customer experience.

Real-time Executive Level Visibility - Gain clear understanding of how customers are engaging across your payment channels.

Proactively Detect Transaction Issues - Elevate customers satisfaction by proactively finding and resolving transaction issues at the source.

Ensure Optimal System Performance - Deliver a seamless payments experience  by optimizing the performance of your mission-critical payments solutions.

With IR, businesses don’t just keep their payments running smoothly; they can leverage data-driven intelligence to optimize performance, mitigate risk, uncover new opportunities for growth, and unlock deeper insights to drive real business value.

Ready to discover deeper insight and drive business
growth? Find out how with IR Transact.