Commercial Instant Payments: Global Update Part 1

Instant payments are not new. In 1973, Japan introduced the first instant payment system, Zengin. In 1987, the Swiss released the Swiss Interbank Clearing System (ICS), and in 2002, Brazil introduced SITRAF, the predecessor of the modern-day and much-utilized Pix system. Instant payments have evolved considerably since Japan introduced Zengin. More than 70 countries have incorporated instant payments, and there has been a notable expansion in the United States through The Clearing House's RTP network and the introduction of the Federal Reserve-supported FedNow in July 2023. 

The global surge in instant payment adoption can be attributed to various factors that are collectively transforming the landscape of financial transactions. First, the rapid advancement of technology has enabled financial institutions to create efficient and secure real-time payment systems, and consumers and businesses increasingly prioritize the immediacy and convenience offered by these new instruments. Second, the growing demand for improved cross-border transactions and the ascent of digital commerce have intensified the necessity for real-time solutions. Third, the widespread use of mobile banking and digital wallets has fueled momentum toward financial inclusion, prompting more countries and financial entities to embrace instant payment systems in a shift toward a more accessible financial ecosystem.