Banks ‘underprepared’ for instant payments: report

Only 30% of APAC banks have a strong tech foundation for instant payments.

Banks in the Asia Pacific region remain “underprepared” for instant payments, according to a report by Capgemini Research Institute.

Only 30% of APAC banks expressed confidence in having a strong technological foundation for instant payments, the study found.

Digital wallets– card-linked and non-card-linked wallets– remain the dominant mode of payment for APAC consumers in e-commerce (77%) and in-store point of sales (POS) checkouts (66%).

However, the future is geared towards instant payments, at least according to Capgemini. Instant payments are predicted to account for 22% of all non-cash transaction volumes by 2028 globally.

Non-cash transaction volumes rose to 1,411 billion in 2023 and are reportedly on track to reach 1,650 billion in 2024 and 2,838 billion by 2028. APAC is expected to lead in its adoption. 

Account-to-account (A2A) instant payment solutions present a faster and cost-effective way to pay, bypassing expensive card networks, which Capgemini believes will be key to its rising popularity in the near future. 

This could lead to traditional payment cards growing at a slower rate. Capgemini estimates that instant payments could offset 15-25% of future card transaction volume growth.

Overall, APAC continues to be one of the fastest growing regions for non-cash transactions worldwide, reporting a 20% year-on-year (YoY) increase in 2024.

Instant payments accounted for 26% of the payment mix in 2023.  

APAC’s non-cash B2B payments are on the rise, with growth projected at 14% YoY for 2024, versus Europe’s 11.6% growth and North America’s 7% growth.