Real-time is the big news in the world of payments — but also the source of many questions, as FIS notes in the latest edition of its annual report on the industry. The report, Flavors of Fast, was released this week at Sibos in London.
Elena Whisler, head of global product management at FIS, described the current state of affairs as just the start of a payments revolution.
“The advent of open APIs that offer empowering overlay services on top of the real-time rails has the potential to radically change the way consumers, retailers, small businesses, corporations, and governments accept and make payments,” she said.
The report offers a range of possibilities, rather than concrete predictions, noting that a key issue will be where, when, or if banks see ROI from real-time payments. That will depend largely on their ability to create profitable services, probably using APIs.
The number of countries now live with real-time payments has jumped to 54 – nearly quadruple the number of countries participating in real-time payments in 2014.
“The epicenter of real-time payment development remains in APAC countries, where volumes are surging and account for two-thirds of total global spending,” said the report.
Big tech players like Amazon, Facebook, Google, and Apple are making frequent announcements in payments, and major fintech companies are active as well. Both Visa and Mastercard are investing in payments, with cross-border capabilities. FIS bought Worldpay, and the combined entities will process 75 billion transactions per year. Fiserv, not mentioned in the report, bought First Data in January.
The FIS research found that growing use of chat-based services, retail apps, instant loans, and open APIs, as well as the migration toward the ISO 20022 global payments standard, are key factors driving the increased adoption of real-time payments around the world.
“Real-time payments are expanding across the globe at an unprecedented pace,” said Ron Van Wezel, senior analyst at Aite Group. “Financial institutions that have a strategy in place for real-time payments will be ahead of the game.”
In India, payment and chat are converging. Money transfer apps Google Pay and Paytm feature chatting capability, while chatting apps WhatsApp and Hike have instant payment mechanisms.
FIS warns that progress will be slower without standards for banking APIs.
Flavors of Fast is ambitious in its global reach, but also annoying in its vagueness: “In fact, it is very likely that players not typically associated with payments will drive significant investment in new solutions that increase customer convenience, and subsequently grow the adoption of real-time payments services.”
Perhaps the whole payments industry is evolving in a way that eludes broad, definitive descriptions.