Factors driving the widespread adoption of instant payments
| Factor | Factor clarification | Country examples |
|---|---|---|
| Regulatory support | Regulation, active engagement from a central bank or other public authorities | India (UPI) – NPCI established by the RBI, together with Indian banks, as the UPI operator governing the entire system strictly |
| Brazil (PIX) – BCB as the infrastructure provider and the system’s rulebook owner, directly managing PIX development | ||
| USA (FedNow) – the Fed providing clearing and settlement rails | ||
| EU (SCT Inst) – EU enacting the Instant Payments Regulation (IPR) | ||
| Open ecosystem and inclusive collaboration | Public-private alliances, inclusion of all PSPs in the instant payment ecosystem | India (UPI) – NPCI platform, close cooperation of RBI with banks connecting bank accounts to UPI, providing digital wallets (PPIs) in the hands of fintechs and bigtechs |
| Brazil (PIX) – mandatory participation for large banks and encouragement for all PSPs (smaller banks and payment institutions) to join the system | ||
| USA (FedNow) – inviting all financial institutions to become FedNow participants | ||
| EU (SCT Inst) – openness towards all PSPs to offer SCT inst, enabling direct access to designated payment systems for non-bank PSPs | ||
| Poland – cooperation between Express Elixir and BLIK for BLIK P2P mobile payments, including more PSPs in the BLIK system as issuers and acquirers | ||
| Network effects on the supply side of the market | Reach, interoperability, and common and reliable infrastructure | India (UPI) – NPCI operating infrastructure for settlement of transactions and establishing common rules for PSPs and UPI users, ubiquitous use of UPI between banks and fintechs |
| Brazil (PIX) – BCB in charge of processing PIX payments and managing a PIX rulebook and PIX API specifications, PIX in an offer of banks, credit cooperatives, and payment institutions, ISO 20022 message standard | ||
| USA (FedNow) – cloud-based clearing and settlement infrastructure at the FED, enrolling new financial institutions, ISO 20022 message standard | ||
| EU (SCT Inst) – Instant Payments Regulation with fixed deadlines for PSPs adopting instant credit transfers in euro, uniform pricing rules, verification of payee service, and sanction screening, ISO 20022 message standard | ||
| Poland – constant inclusion of more banks in Express Elixir and BLIK systems, BLIK payment feature available in all bank apps | ||
| Network effects on the demand side of the market | Pricing, bringing payers and payees on board, user-centric approach | India (UPI) – incentivising usage through abandoning transaction fees for payers and lifting or reducing interchange fees (and merchant service charges) for shops |
| Brazil (PIX) – free-of-charge PIX payments for payers, low merchant service charges, significantly lower than those associated with debit and credit card payments | ||
| EU (SCT Inst) – instant credit transfers in euro charged at rates no higher than those for regular credit transfers (under IPR) | ||
| Poland (BLIK) – offering free P2P instant BLIK payments | ||
| Constant development through use cases and security improvements | New use cases for different payment setups (P2P, P2B, P2G, B2B, B2C, G2C, etc.), ongoing improvement of security measures | India (UPI) – new features such as announced in August 2024 BillPay for Business designed to streamline B2B transactions across various accounting platforms, and UPI Circle, enabling users to delegate payments to others, improving security protocols, expansion abroad to Asia, Europe, Middle-East and South America |
| Brazil (PIX) – developing new use cases like Offline PIX, Automatic PIX, Guaranteed PIX and even a groundbreaking CBDC-based PIX super app (functionalities set to be launched progressively in late 2024 and throughout 2025), alerts and freezing funds in case of suspected fraud | ||
| USA (FedNow) – continuous efforts to improve the current system features and develop new use cases such as BillPay and Request-to-Pay | ||
| EU (SCT Inst) – plans to use SCT Inst in new payment solutions such as Wero digital wallet operated by the EPI (European Payments Initiative) aspiring to rival American card payments in Europe, prospects for widespread utilisation of SCT Inst in enhancing the quality of A2A open banking payments throughout the EU | ||
| Poland (BLIK) – international expansion of BLIK, currently underway, with ongoing efforts to extend its reach to Slovakia and Romania, as well as to other European countries, integrating contactless BLIK into Apple’s ecosystem, integrating BLIK with Revolut’s platform, continuous initiatives to enhance the existing BLIK service among participating PSPs, focusing on providing improved user experience |
| Factor | Factor clarification | Country examples |
|---|---|---|
| Regulatory support | Regulation, active engagement from a central bank or other public authorities | India (UPI) – NPCI established by the RBI, together with Indian banks, as the UPI operator governing the entire system strictly |
| Brazil (PIX) – BCB as the infrastructure provider and the system’s rulebook owner, directly managing PIX development | ||
| USA (FedNow) – the Fed providing clearing and settlement rails | ||
| EU (SCT Inst) – EU enacting the Instant Payments Regulation (IPR) | ||
| Open ecosystem and inclusive collaboration | Public-private alliances, inclusion of all PSPs in the instant payment ecosystem | India (UPI) – NPCI platform, close cooperation of RBI with banks connecting bank accounts to UPI, providing digital wallets (PPIs) in the hands of fintechs and bigtechs |
| Brazil (PIX) – mandatory participation for large banks and encouragement for all PSPs (smaller banks and payment institutions) to join the system | ||
| USA (FedNow) – inviting all financial institutions to become FedNow participants | ||
| EU (SCT Inst) – openness towards all PSPs to offer SCT inst, enabling direct access to designated payment systems for non-bank PSPs | ||
| Poland – cooperation between Express Elixir and BLIK for BLIK P2P mobile payments, including more PSPs in the BLIK system as issuers and acquirers | ||
| Network effects on the supply side of the market | Reach, interoperability, and common and reliable infrastructure | India (UPI) – NPCI operating infrastructure for settlement of transactions and establishing common rules for PSPs and UPI users, ubiquitous use of UPI between banks and fintechs |
| Brazil (PIX) – BCB in charge of processing PIX payments and managing a PIX rulebook and PIX API specifications, PIX in an offer of banks, credit cooperatives, and payment institutions, ISO 20022 message standard | ||
| USA (FedNow) – cloud-based clearing and settlement infrastructure at the FED, enrolling new financial institutions, ISO 20022 message standard | ||
| EU (SCT Inst) – Instant Payments Regulation with fixed deadlines for PSPs adopting instant credit transfers in euro, uniform pricing rules, verification of payee service, and sanction screening, ISO 20022 message standard | ||
| Poland – constant inclusion of more banks in Express Elixir and BLIK systems, BLIK payment feature available in all bank apps | ||
| Network effects on the demand side of the market | Pricing, bringing payers and payees on board, user-centric approach | India (UPI) – incentivising usage through abandoning transaction fees for payers and lifting or reducing interchange fees (and merchant service charges) for shops |
| Brazil (PIX) – free-of-charge PIX payments for payers, low merchant service charges, significantly lower than those associated with debit and credit card payments | ||
| EU (SCT Inst) – instant credit transfers in euro charged at rates no higher than those for regular credit transfers (under IPR) | ||
| Poland (BLIK) – offering free P2P instant BLIK payments | ||
| Constant development through use cases and security improvements | New use cases for different payment setups (P2P, P2B, P2G, B2B, B2C, G2C, etc.), ongoing improvement of security measures | India (UPI) – new features such as announced in August 2024 BillPay for Business designed to streamline B2B transactions across various accounting platforms, and UPI Circle, enabling users to delegate payments to others, improving security protocols, expansion abroad to Asia, Europe, Middle-East and South America |
| Brazil (PIX) – developing new use cases like Offline PIX, Automatic PIX, Guaranteed PIX and even a groundbreaking CBDC-based PIX super app (functionalities set to be launched progressively in late 2024 and throughout 2025), alerts and freezing funds in case of suspected fraud | ||
| USA (FedNow) – continuous efforts to improve the current system features and develop new use cases such as BillPay and Request-to-Pay | ||
| EU (SCT Inst) – plans to use SCT Inst in new payment solutions such as Wero digital wallet operated by the EPI (European Payments Initiative) aspiring to rival American card payments in Europe, prospects for widespread utilisation of SCT Inst in enhancing the quality of A2A open banking payments throughout the EU | ||
| Poland (BLIK) – international expansion of BLIK, currently underway, with ongoing efforts to extend its reach to Slovakia and Romania, as well as to other European countries, integrating contactless BLIK into Apple’s ecosystem, integrating BLIK with Revolut’s platform, continuous initiatives to enhance the existing BLIK service among participating PSPs, focusing on providing improved user experience |
Source(s): Own elaboration
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