Following this announcement, the new study found that the overall instant payments market is expected to grow by 161%, up to USD 22 trillion in 2024. This development will be driven by the overall increased popularity of account-to-account (A2A) wallets, such as iDEAL and Twint, alongside the rising popularity and incorporation of Open Banking capabilities.
In addition, A2A and Open Banking payments both enable transactions to be made securely and directly from bank accounts, a process that bypasses the card entirely by reducing costs for merchants and complexity for clients.
Instant payments were developed in order to allow funds to be received in 10 seconds or under, while the confirmation of the transaction will be made available to the parties in one minute.
Open Banking gives digital wallets the possibility to leverage bank payments without requiring partnerships and collaborations with individual banks, aiming to boost and accelerate access to customer data significantly and safely. The report published by Juniper Research forecasts the overall ability to quickly access bank accounts through the use of Open Banking, as well as bank-backed A2A wallets. This process is expected to increase client instant payment transaction volume from 252 billion in 2024 to over 600 billion by 2028.
In addition, A2A wallets are currently popular for peer-to-peer transfers, being used often for informal lending and repayments to friends, family, acquaintances, and loved ones. The report also identifies features such as splitting payments between multiple customers as a key driver to their overall popularity and necessity.
At the same time, the report also recognised the need for optimised merchant acceptance of bank payments, both at physical checkouts and ecommerce, as there is a pressing hurdle to improved customer adoption. In order to increase adoption, officials recommend that traders incentivise client use by providing purchase discounts when leveraging bank-linked payments. In addition, by encouraging adoption, businesses will be enabled to benefit from lower fees for each transaction in comparison to cards.
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