RTP Cross Border Payments: On Path to Their first Milestone: US $ 285B in Value by 2032
Our earlier work outlined growth in real-time payments (RTP) and how regional networks are being created between domestic Faster Payment schemes in Asia, Europe, North America and elsewhere. Some of these efforts have global ambitions like BIS-led CPMI PIE and Project Nexus. Others are targeting regional connectivity and promote local currency use and QR code-based payments for efficient intra-regional transfers. Finally, some efforts are bilateral even if in aggregate they scale-up to resemble regional agreements: India’s UPI agreements with Bhutan, Japan, UAE and Singapore come to mind.
In what follows, we examine the challenges of internationalizing RTP – and how these challenges are being overcome. Beyond the need for technical interoperability and use of ISO 20022 standards, there is the need for centralized oversight, regulatory alignment, and coordinated innovation. These challenges are significant, but so too is the size of the prize.
The most recent estimates suggest the global RTP market could be worth more than US$ 285B by 2032, representing CAGR of 35.4% from current levels.[1] If such growth sounds incredible, then a cursory overview of the benefits of RTP makes such rapid expansion easier to understand. RTPs promise to cut current transaction and settlement times from days to minutes or hours and help speed up the rate at which value flows within and between economies. These facts alone make them highly attractive to the growing numbers of sole traders and microbusinesses springing up after the pandemic, as well as larger SMEs looking to improve their cashflow and governments that need to disburse benefits as efficiently as possible.
For larger corporates and banks, much faster transaction and settlement times could reduce the amount of money they are required to hold to cover overnight settlement exposures, as flows of funds become easier to predict and the gap between payment and settlement reduces dramatically. It also allows them to address use cases across the P2P and P2M payments spectrum more efficiently and pass on better service and pricing to customers. Such wide-ranging benefits notwithstanding, serious challenges remain before these advantages can be realized.
The Devil’s In The (Cross-Border) Detail
In creating RTP networks, banks, fintechs, and governments are effectively inventing new financial infrastructure, even if that infrastructure employs parts of existing systems such as card rails, inter-bank credit transfers like Europe’s SEPA CT, and others. Building new infrastructure brings with it fresh challenges, such as identifying payer and payee in a real-time (<10 seconds) environment to avoid misdirected payments – not to mention providing adequate protection against emerging fraud types specifically linked to RTP. It’s projected that just one of these novel fraud vectors, Authorized Push Payment (APP) fraud, will cost banks in the US, UK, and India almost US$6 billion by the end of next year.[2]
In essence, RTPs require the secure and rapid identification of all parties to a transaction to avoid misdirected payments and fraud risk. This is hard enough at a domestic level: Sweden, for some time the poster-child for RTP, has seen fraud explode in recent years as criminals exploit loopholes in domestic authentication and verification routines.[3] Such challenges only become more pronounced and complex in a cross-border environment with widely varying regulatory requirements, different messaging standards, and fraud threats. And these basic challenges don’t include a whole raft of others, from managing foreign exchange volatility, ensuring adequate liquidity for less frequently-traded currency pairs and more.
Solutions Emerge: Standards, Technologies and Systems
The development of regional RTP networks in South-East Asia, and India’s success in establishing links for its UPI RTP system in the Middle East and across Asia, demonstrate that these challenges can be overcome. The good news is that new standards and technologies are emerging over the next 18 to 24 months that will further accelerate growth in cross-border RTP adoption and facilitate the further development of cross-border networks.
For instance, the introduction of the ISO 20022 data messaging standard, completing in November 2025, will mean that institutions world-wide can operate using a single data format that enables the transfer of rich transaction data. When it comes to RTPs, this will improve the quality and consistency of information transferred between banks, enabling greater transparency regarding the parties to a transaction, faster processing times based on identical data formats, and greater resilience, especially for connections between domestic Real-Time Gross Settlement (RTGS) systems.
Verification of Payee technologies (also known as Confirmation of Payee) are another emerging technology set that’s set to dramatically improve the security and efficiency of RTP systems. Present in the Netherlands and the UK since 2018, and more recently adopted by India and Australia, Verification of Payee (VoP) systems confirm the identity of both payer and payee in real time, making payments more secure and reducing the risk of misdirection. In the Netherlands, misdirected payments were cut by 81% following the introduction of VoP, while RTP fraud was reduced by 60%.[4] VoP’s effectiveness has led to this technology being mandated for banks across the EU from the end of 2025 as part of the drive to create a single RTP system for the bloc, known as SEPA-Inst.
Finally, Visa, Mastercard, and other players are pioneering the introduction of tokenization in RTP networks. Payment tokenization replaces sensitive account and payment information, such as account numbers, with a unique set of characters – known as tokens – in the transaction data flow. This means that account and payment information is neither transmitted or stored during the transaction process, and that data quality and integrity can be maintained, leading to fewer false positives in anti-fraud systems and fewer transaction declines – all within the context of real-time account-to-account transfers that dramatically reduce time lags between payment and settlement, world-wide.
The introduction of RTP world-wide amounts to a global payments revolution, particularly when it comes to transaction and settlement time and cost. RTP will see cross-border transaction times slashed to a fraction of previous levels: over time, we also anticipate a concomitant reduction in the cost of cross-border transactions as schemes first regionalize, then go global, and are able to leverage economies of scale as volumes increase. The introduction of the revolutionary improvements in transaction and settlement times which RTP represents was never going to be without its challenges; however, we’ll see the emergence of new solutions over the next 18 months that will address these problems not just at a national level, but regionally and, ultimately, world-wide.
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[1] Fortune Business Insights, 19 March 2025: “Global Real-time Payments” : https://www.fortunebusinessinsights.com/real-time-payments-market-110424
[2] Fintech Global, 10 August 2023: “Is APP fraud the biggest threat to FinTechs?”: https://fintech.global/2023/08/10/is-authorised-push-payment-fraud-the-biggest-threat-to-fintechs/
[3] Bloomberg, 21 April 2024: “Sweden Faces Soaring Digital Fraud”: https://www.bloomberg.com/news/articles/2024-06-21/sweden-led-europe-s-move-to-cashless-economy-now-it-faces-soaring-fraud
[4] Finextra, 7 January 2025: “Tietoevry Banking Achieves Mandate for Roll-Out of Verification of Payee”: https://www.finextra.com/newsarticle/45270/tietoevry-banking-achieves-mandate-for-roll-out-of-verification-of-payee