By Celestine Okorie, Senior Correspondent, South Africa

African nations are looking to real-time payments to help drive economic growth and financial inclusion, according to the 3rd edition of Prime Time for Real Time 2022, published by ACI Worldwide, in partnership with GlobalData, a leading data and analytics company, and the Centre for Economics and Business Research.

The report – tracking real-time payments volumes and growth across 53 countries – includes an economic impact study for the first time, providing a comprehensive view of the economic benefits of real-time payments for consumers, businesses and the broader economy across 30 countries. The report covers all G20 nations, excluding Russia. *

The research shows that governments that advance the real-time modernization of their national payments infrastructure create a win-win situation for all stakeholders in the payments ecosystem: consumers and businesses benefit from fast, frictionless and hyper-connected payments services, financial institutions future-proof their business in a highly competitive environment by speeding up cloud-first and data-centric modernization, and national governments boost economic growth, reduce the size of their shadow economy and create a fairer financial system for all.

Africa Regional Highlights

South Africa

•             Real-time payments have failed to gain traction despite being available for more than 15 years. And accounted for only 0.8 per cent of the country’s total payments in 2021.

•             Transaction volumes in 2021 were 123 million, predicted to rise to 499 million by 2026 – a CAGR of 32.4 per cent.

•             Real-time payments accounted for USS15 million of economic output, equivalent to 0.003 per cent of formal GDP in 2021, rising to US$183 million and 0.03 per cent of forecasted GDP in 2026, respectively.

Nigeria

•             Unlike South Africa, Nigeria’s decade-long relationship with real-time payments has evolved into Africa’s most developed and successful real-time payments scheme.

•             In 2021, the country recorded 3.7 billion real-time transactions 2021 which resulted in estimated cost savings of US$296 million for businesses and consumers – which helped to unlock $US3.2 billion of additional economic output, representing 0.67  per cent of the country’s GDP

•             With real-time transactions set to rise to 8.8 billion in 2026 – net savings for consumers and businesses are forecast to climb to US$2.3 billion, helping to generate an additional $US6 billion of economic output, equivalent to 1.01 per cent of the country’s forecasted GDP.

•             According to the Cebr, the theoretical impact of all payments in Nigeria being real-time could add 4.4 per cent of formal GDP by 2026. This does not suggest that there is no longer place for non-instant electronic payments or paper-based payments.

Despite the mixed success from the few existing real-time schemes, Africa remains a continent of untapped potential, with 20 states absent from any real-time payments scheme as of 2021.

“Africa is in an ideal position to capitalise on the lessons learned from other countries and continents and maximise the impact and benefits real-time payments provide,” said Santhosh Rao, Head of Middle East, Africa, and South Asia, ACI Worldwide. “There is a renewed appetite and enthusiasm across the continent to increase financial inclusion and use real-time payments to build the continent’s future digital economies.”

“Real-time transactions and growth forecasts continue to rise globally, with emerging countries like India leading the way and outpacing developed nations. As governments around the globe, especially step up their interventions in real-time payments, they are viewed as the primary enabler of economic growth and prosperity, providing consumers and businesses with cheaper, faster, and more efficient payment methods.” Chief Product Officer, ACI Worldwide, Jeremy Wilmot. “In India, payments are increasingly becoming embedded into non-financial digital apps and services, with customers looking for a hyper-connected, frictionless user experience,” continued Jeremy Wilmot.

“By allowing for the transfer of money between parties within seconds rather than days, real-time payments improve overall market efficiencies in the economy,” commented Head of Advisory, Centre for Economic and Business Research, Owen Good. “Real-time payments improve liquidity in the financial system and therefore function as a catalyst for economic growth. This is especially important for our fast-paced and digital-led gig economies. Workers are paid quickly, allowing them to better plan their finances. Businesses have more flexible and reduce the need for burdensome cashflow management.”

“Developing nations continue to drive the majority of real-time volume gains, confirming the industry trend of the strongest growth coming from economies with minimal existing electronic payments infrastructure, and therefore heavier reliance on cash,” said Lead Analyst, GlobalData, Sam Murrant. “Amid all this activity, mobile in its multiple forms will shape the trajectory of real-time payments for developing markets. India provides the template for mobile wallet integration with underlying real-time payment systems. Mobile will still be the leading form factor in developed markets. However, we may see banks’ involvement sitting more behind wallets.”