According to a recent report by Juniper Research, the world of financial transactions is set to see a surge in instant payments, with projections reaching over $58 trillion globally by 2028. This marks a significant increase from the $22 trillion recorded in 2024, showcasing a robust growth trajectory in the realm of Account-to-Account (A2A) wallets and Open Banking systems.
Growth Driven by A2A and Open Banking
The impressive growth in instant payments is primarily fueled by the rise of A2A wallets, such as iDEAL and Twint, and the expansion of Open Banking. These platforms facilitate direct bank account transactions, sidestepping traditional card payments, thereby reducing costs for merchants and simplifying the payment process for consumers. Instant payments are defined by their rapid processing time, where funds are received in under 10 seconds, with confirmation available within a minute.
Open Banking is particularly significant as it allows digital wallets to utilize bank payments without individual bank partnerships, which broadens access and utility. The report highlights that consumer transaction volumes through these instant payment methods are projected to grow from 252 billion transactions in 2024 to over 600 billion by 2028. This increase is also supported by the popularity of A2A wallets for peer-to-peer transfers and informal lending.
Michael Greenwood, the author of the report,emphasizes the advantages for merchants, stating:
To increase adoption, we recommend that merchants incentivise consumer use by offering purchase discounts when using bank-linked payments. By encouraging adoption, merchants will benefit from lower fees for each transaction in comparison to cards.
Despite these advancements, the report notes the necessity for increased merchant acceptance of bank payments at both physical checkouts and online to overcome obstacles to broader consumer adoption. Addressing these challenges is important for the continued expansion and acceptance of instant payments.
