Fast payments offer potential for faster digital financial inclusion and faster growth

Technological evolution is disrupting the finance industry and helping hundreds of millions of people around the world get tools they need to conduct daily business and save for the future. This has been most evident in the case of fast-payment systems, which have demonstrated potential to transform the way people, businesses and governments make and receive payments. With the right support and enabling environment, fast payments could expand much further and drive greater access to financial services, leading to stronger growth and poverty reduction. 

For example, in just one year of operations, Brazil’s FPS, known as Pix, outpaced all other payment methods, recording more than 150 million users. Currently, nine out of ten small businesses in the country rely on Pix. Transactions and associated cost savings for consumers and businesses are forecast to continue growing and providing a significant boost to overall economic growth. In Thailand, for example, the fast-payment system, PromptPay could generate an additional economic output equivalent to as much as 2 percent of the forecasted GDP in 2026.

Also known as instant or real-time payments, fast payments are characterized by the instant transmission of the payment message and by the immediate availability of funds to the beneficiary on a 24/7/365 basis. Fast-payment systems can support different payment instruments and purposes across multiple channels. They generally allow for the participation of diverse service providers, including banks and non-banks, therefore driving competition, interoperability, and efficiency gains in the market, while offering a layer of innovation for other products and services, for example enabling the transfer of funds using aliases such as mobile phone or email.

Fast payments can drive financial inclusion, especially in developing economies, where according to the World Bank’s Global Findex Database 2021, about 30 percent of adults still do not have a formal transaction account and more than 40 percent do not make or receive digital payments.

Central banks see fast payments as a building block for the modernization of the financial ecosystem and the digitalization of the economy.  In India, fast payments were developed to pursue the vision for a “less-cash” economy, through higher accessibility and a unified interface to make payments.

The roll-out of fast payments can also accelerate the digitalization of government transactions, notably in case of emergencies or natural disasters. In Pakistan, the digital delivery of social safety and poverty alleviation programs underpinned the launch of RAAST in 2021, which is  expected to facilitate access to social programs for 16 million women.

Fast payments can enable more efficient remittances, allowing migrants to reach their families at home in real-time and lowering the cost of these transactions  closer to the 2030 target set by the United Nations Sustainable Development Goals of less than 3 percent. While the global average cost of sending remittances--now 6.25 percent—is  far from this target, the cost of digital remittances falls is just 4.72 percent. By operating as a digital public infrastructure, fast payments can encourage further the adoption of digital remittances.

About 100 jurisdictions have introduced fast payments, and several others have announced plans to go live soon. Nonetheless, in most of these countries, fast payments are still in their early stages and far from reaching their full potential. It is crucial to speed up development and international cooperation for these systems and unlock their benefits.

The World Bank’s Project FASTT (Frictionless Affordable Safe Timely Transactions) is promoting digital financial services around the world. With the support of the Bill & Melinda Gates Foundation, Project FASTT focuses on:

• expanding knowledge,
• building capacity for central banks and other key institutions,
• raising awareness and advocating for adoption,
• convening global stakeholders and other international bodies,
• continuing to provide technical assistance for enhancements and new implementations.

Currently, the project is supporting 16 jurisdictions in different geographies and will include more soon.