Real-Time Payments Will Grow Nearly 300% Over the Next Five Years, Juniper Predicts

The growth of real-time payments over the next five years will gain momentum from cross-border transfers in a global economy, according to research released early Monday. Indeed, the total number of real-time transactions, also known as instant payments, worldwide will reach 376 billion in 2027, up 289% from 97 billion, Juniper Research forecasts.

But real-time cross-border traffic will grow faster than domestic around the world over the same time period, reaching more than 6 billion transactions, the United Kingdom-based research firm says in a report entitled “Instant Payments: Future Opportunities, Regional Analysis & Market Forecasts 2022-2027.”

The development of new real-time payment platforms, particularly in Europe and the United States, will also play a key role in driving this growth as the platforms establish bilateral processing agreements, the firm says. In the U.S. market, the Federal Reserve is expected to launch its FedNow real-time payments network next summer, while a variety of private companies have been processing real-time transactions, including The Clearing House Payments Co. LLC, a bank-owned system, whose Real Time Payments platform has been in operation since 2017.

Time and cost savings from instant payments, along with better cash-flow management, will prompt more businesses to adopt instant payments over time, Juniper says, leading to a five-fold growth in dollar volume globally, to $33 trillion in 2027 from $6 trillion this year. For the purposes of its research, Juniper defines what it calls an instant payment as: “Any payment scheme where funds are capable of being received in 10 seconds or under, outside card networks, and confirmation of the payment to the parties is available in one minute maximum.”

Juniper projects that consumers will adopt instant payments for person-to-person transfers but not so much for retail transactions. In the latter transactions, “the consumer perceives the transaction to be over when they have possession of the product, whether the payment has been settled by that time or not,” Juniper says. With P2P transactions, however, users “perceive the payment to be over when the receiver has access to the funds.” For P2P payments, then, senders “will prefer instant payments as it concludes the transaction quicker.”