Insights on the Future of Real-time Payments in 2024: Predictions from Experts at Endava, Nium, CloudWalk, and AutoRek.

Peering into 2024, FinTech Magazine has compiled insights and expertise from numerous leaders across the financial services spectrum. This installment zooms in on the prospective landscape of real-time payments.

Andy Davies, Global Head of Payments at Endava

Anticipate a positive shift in 2024 as real-time payments gain momentum in the realm of cross-border transactions. Ongoing innovations aim to address the current challenges of transparency and control regarding the whereabouts of funds within the system. This transformation is facilitated by the richer data landscape accompanying the shift to ISO20022, particularly beneficial for enhancing Know Your Customer (KYC) and Anti-money Laundering (AML) compliance.

The B2B sector is poised to reap substantial benefits from advancements in modern cross-border payments, representing 80% of all such transactions. However, heightened transaction values in this space necessitate robust security measures to ensure reliability and prevent losses from fraudulent activities. Consequently, B2B payments may experience increased friction in terms of authentication and consent.

Organizations must align with emerging industry trends in cross-border payments, staying attuned to evolving banking standards and implementing practical applications of current and forthcoming developments. In this era of borderless transactions, dedicating time and technological resources to enhance the cross-border payment experience is not only crucial for seamless payments but also for fostering growth, effective liquidity management, and risk mitigation.

Manuel Sandhofer, SVP & General Manager, Europe at Nium

The financial services sector is undeniably undergoing a significant digital transformation, with frictionless cross-border payments playing a pivotal role in driving this change. This capability empowers economies and businesses globally to embrace a more interconnected and globalized landscape. If 2026 is projected to mark the year when the global payments system reaches a substantial $3 trillion, 2024 is poised to be the starting point for fully unlocking this potential and setting the stage for transformative growth.

In the coming year, the introduction of new regulations, such as an updated PSD2/3 framework and the implementation of the New Payments Architecture in the UK, will present fresh challenges for business leaders while concurrently fostering an environment conducive to payment innovation. This shift is anticipated to intensify competition for traditional banks, compelling them to engage in strategic fintech partnerships to stay in sync with the evolving needs of their customers.

Looking beyond conventional remittance services, 2024 is expected to witness the emergence of new use cases for real-time global payments. Whether it involves online marketplaces facilitating payments to their global merchant sellers, streaming platforms disbursing funds to content creators worldwide, or insurance companies settling claims for businesses across borders, various industries are increasingly embracing the infrastructure for real-time global payments.

Luis Silva, Founder and CEO at CloudWalk

Instant or real-time payments between consumers and merchants have become the standard in numerous countries worldwide, yet the United States lags in adoption. This delay is depriving local merchants of the advantages associated with immediate access to their cash flow.

While ACH, Fedwire, and credit/debit card-based processes currently dominate the US payment landscape, the tide is expected to turn towards instant payments in the upcoming year, following the recent launch of FedNow by the Federal Reserve.

Anticipating this shift, many US fintech companies are likely to integrate instant payments into their offerings, especially in light of the prevailing high-interest-rate environment.

In conjunction with instant payments, the rise of Tap to Pay technology is noteworthy. This innovation transforms any smartphone into a payment device, and major players like Apple are actively investing in and launching Tap To Pay on iPhones across key global markets. In essence, merchants can expect a distinctive evolution in payment methods next year.

Nick Botha, Global Payments Manager at AutoRek

In 2024, we anticipate the next natural progression in real-time payments. Modern consumers already demand instant payments, and innovations like QR codes and Request to Pay are catalyzing irreversible changes in how end-users conduct transactions. The evident correlation between real-time payments and economic growth is prompting governments to recognize its potential, leading to a concerted effort towards widespread adoption in the coming year and beyond.

The ubiquity of instant payments is poised to extend to both national and regional payment networks, driven by central banks actively developing real-time infrastructure to meet consumer expectations. Ongoing advancements in Central Bank Digital Currencies (CBDCs) and the evolution of emerging payment infrastructure will elevate real-time payments from a mere convenience to an essential component in most markets, solidifying their place as a mandatory feature in the offerings of banks and payment firms.

However, the central push towards real-time payments will exert pressure on the back and middle offices as companies strive to accommodate higher transaction volumes. Firms must ensure that their existing infrastructure and systems are equipped to process payments in real-time and keep pace with the ever-evolving spending habits of consumers.