Instant payments, where funds are received in 10 seconds or less and payment confirmation is available within a minute, are poised to redefine the financial transactions landscape.
According to a comprehensive new study by Juniper Research, the instant payments market is expected to grow by 161%, escalating from $22tn in 2024 to over $58tn by 2028.
This significant expansion is primarily fuelled by the growing acceptance of Account-to-Account (A2A) wallets like iDEAL and Twint and the burgeoning popularity of Open Banking. Both A2A and Open Banking facilitate transactions directly from bank accounts, bypassing traditional card systems, thus cutting costs for merchants and simplifying processes for consumers.
Open Banking, in particular, is enhancing the capabilities of digital wallets, allowing them to access bank payments without needing individual bank partnerships. This development significantly broadens user access and is forecasted to increase the volume of consumer instant payment transactions from 252 billion in 2024 to over 600 billion by 2028.
A2A wallets, which are popular for peer-to-peer transfers and informal lending among friends and family, are also seeing an uptick in usage due to their ability to split payments among multiple users—a feature highlighted in the report as a key driver of their popularity.
However, for this potential to be fully realised, greater merchant acceptance of bank payments is necessary, both in physical stores and online. The report underscores this as a crucial barrier to wider consumer adoption. Michael Greenwood, the report’s author, suggests, “To increase adoption, we recommend 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.”
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