Learnings from Real-time Payment Systems | A focus on India and Brazil

In today's digital age, real-time payments are gaining a lot of focus and momentum due to their ability to offer instant, secure and efficient transactions, benefiting businesses, consumers and economies worldwide. South Africa has the same focus, and in March 2023, the payment industry launched a new real-time payment system named PayShap. However, the transaction volumes are still relatively low (seventy six million transactions by September 2024) compared with real-time payments in other countries. Due to this and other challenges, the South Africa Reserve Bank (SARB) officially launched the Payments Ecosystem Modernisation programme in 2024, with one pillar focusing on maximising the usage of a local real-time payment system based on learnings from other markets.

Two global success stories of real-time payment systems include UPI in India and PIX in Brazil. Launched in large economies, both have become the most preferred payment methods in their respective countries.

In India, the Unified Payments Interface (UPI) has become a game-changer by enabling seamless person-to-person and person-to-merchant transactions directly from bank accounts via mobile phones. Since its launch in 2016, UPI has experienced exponential growth, processing billions of monthly transactions. Its success is attributed to its interoperability across banks and Payment Service Providers (PSPs), robust security features and, most importantly, its user-friendly interface that has made digital payments accessible. It has not only simplified payments but has also promoted financial inclusion by reaching unbanked and underbanked populations.

Brazil launched its real-time payment system, PIX, in 2020, and it has rapidly become popular due to its ability to process instant payments 24/7, including weekends and holidays. Additionally, PIX transactions are free for individuals and instantaneous for businesses, offering an alternative to traditional banking methods and reducing dependence on cash. This blend of speed, convenience and cost-effectiveness is transforming the payment system in Brazil.