2024Trends

inRegional

PaymentsInsidetheEvolvingGlobalPayments

LandscapeEBOOK

TrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeAbout

RippleRippleistheleaderinenterpriseblockchainandcryptosolutions,transforminghowtheworldmoves,manages,tokenizesandstoresvalue.Ripple’sbusinesssolutionsarefaster,moretransparent,andmorecosteffective—solvinginefficienciesthathavelongdefinedthestatusquo.Andtogetherwithpartnersandthelargerdevelopercommunity,weidentifyusecaseswherecryptotechnologywillinspirenewbusinessmodelsandcreateopportu-nityformorepeople.Witheverysolution,we’rerealizingamoresustainableglobaleconomyandplanet-increasingaccesstoinclusiveandscalablefinancialsystemswhileleveragingcarbonneutralblockchaintechnologyandagreendigitalasset,XRP.Thisishowwedeliveronourmissiontobuildcryptosolutionsforaworldwithouteconomicborders.LearnmoreaboutRippleat

.ContentsIntroduction3OpenBankingontheRiseinNorthAmerica

4GoingCashless:SpotlightonStablecoinsforPayments

10AsiaPacific:LeadingtheWayinInstantPayments

12Africa:CryptoandMobilePaymentsFuelFinancialInclusion

17LatinAmerica:DitchingCashandFindingCrypto

21Europe:NoTimeLikethePresentforInstantPayments

26Conclusion

30Acrossthemodernarcofpayments,McKinseydescribesdistincteras

markedbypaper,plastic,andaccounts.Now,aneweraisemergingmarkedbyadecouplingwhereamixofbanks,paymentserviceproviders,andfintechsinstitutenewproductsandtechnologiestotryandkeepupwiththeever-growingdemandforcross-border

payments.Whilepaymentstrendsvarybyregion,somethemesaremorepronouncedglobally.Withineachregion,modernizedpaymentssolutions,includingblockchain-enabledpay-ments,arebringingfaster,moreinclusive,and

transparentexperiences.Theaccelerationofinstantpaymentsispavingthewayforfaster,moreefficientpaymentrails.Andtheadoptionofopenbankingispavingthewayforgreatertransparency.Stakeholdersfromcentralbanksandsuperappproviderstoruralconsumersstandto

gain.ThisreportexploresprincipalpaymenttrendsthroughoutNorthAmerica,LatinAmerica,Europe,Asia,and

Africa.Weexaminethegenesisofthese,andspotlightsuccessbarriers,opportunities,andpotential

impacts.Majorshiftsdrivenbyconsumerpreferences,regulatorymovements,andnewtechnologieshaveupended

paymentsexperiences.Introduction3TrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeIntroduction01Open

Bankingonthe

RiseinNorth

AmericaModernizedpaymentsystemsandfinancialservicesaregainingtractionacrossNorthAmericaasstandardizedmessaging,securedataexchange,andinteroperabilitytakeshape.Here,weexaminehowopenbanking,FedNow,andISO20022havecontributedtostreamliningthefinanciallandscapeinthis

region.TrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeBanksandfintechsacrosstheregionareleveragingalternativestotraditionalpaymentexperiencesandadoptingtechnologiesforreal-timepaymentsusecasesextendingthroughB2B,B2C,A2A,P2P,G2C,and

beyond.Today,thedynamicofconnectingvariousbankingandpaymentcardaccountsisleadingtomorecustomizedpaymentsproducts,fasteraccesstocreditandfinancing,andgreaterfinancialcontrolfor

individuals.1Researchsuggeststhattheglobalopenbankingmarketwilleclipse$130billionby2028,drivenbyrisingconsumerandinstitutionalpreferencesfordigitalpayments.In2022,themarketreached$15.21billion,butissettoexpandataremarkable24.6%estimatedCAGRduetothegrowinguseofdigitalpaymentsandmobile

wallets.Additionally,openbankingsolutionshaveskyrocketedacrossmyriadindustrieslikefinancialservices,healthcare,retail,and

insurance.2OpenBanking

101Openbanking

takesplacewhenbanksandfinancialinstitutionsgive

customersandcustomer-approvedthirdpartiesdigitalaccesstofinancial

data.Thesethirdpartiesareoftenabletoinitiatepaymentsaswellasdownloadandeasilyshareinformationonaccountbalances,payments,transactions,investmentsand

more.Thereareanumberofbenefitstoopenbanking,such

as:BroadenedrevenuestreamsthroughnewAPI-enabledproductsImprovedcustomerpersonalizationandsatisfactionviaincreased

touchpointsStrengthenedrelevanceforfinancialinstitutionsthroughdiversificationofclientofferingsExpandeddatatransfercapabilitiesinwhichcompeti-tivethird-partyproviderscanaccessbankaccountandtransactiondatathrough

APIsSupportforfinancialinclusionasabroaderrangeofdatapointscanbeusedtoassessacustomer’screditworthinessCustomerswhoconsenttoshareinformationwithinanopenbankingsystemgiveprovidersabetterunderstand-ingoftheirneeds,enablingstreamlinedpaymentssolutions,personalizedproductsandofferings,andbetteruser

experiences.$130BTheglobalopenbankingmarketwilleclipse$130

billionby2028,drivenbyrisingconsumerandinstitutionalpreferencesfordigital

payments.TrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeOpenBankingontheRiseinNorth

America5Early,butEager:Open

BankingTrendsinNorth

AmericaEuropeandtheUnitedKingdomhavehistoricallybeenthefirst-moversacrossopenbankingadoption,however,risingUS-basedsupportisunderway.Accounttoaccountpaymentswhichrepresent45%ofallelectronicpaymentsaregrowing280%yearoveryearintheUK.Inparallel,71%ofUSconsumersnowsaythey’dliketomakepurchasesorpaybillsdirectlyfromtheirbank

account.3Thepastyearhasseenanuptickinnewsworthyopenbankinginitiatives.Coinbaseannouncedapartnership

withanaccount-to-accountinfrastructurecompanytoimprovedepositandwithdrawalexperiencesinCanada,theworld’sthird-mostcrypto-aware

nation.4Welcomingopenbankingopportunitiescanresultinariseincompetitionandadownwardpressureonmargins,whichdrivetraditionalfinancialinstitutionstoeitherfindnewrevenuestreamsornewcost-savingmeasures.Companiesharnessingthebenefitsofopenbanking—particularlythoseincorporating

blockchaininnovations—havetheopportunitytoaddressboth

issues.Whiletheimpactopenbankinghasonbanks,creditunions,paymentserviceproviders,andlegacyinstitutionsmustbeconsidered,thereisampleeconomicopportunityforconsumersandthemarketstowhichtheseinstitutionscontribute.LeadersattheFinancialDataExchange

(FDX)—anon-profitindustrystandardsbodydedicatedtounifyingthefinancialservicesecosystem—reportthatopenbankinginitiativesarethrivingintheUS.Lastyear,theyestimatedthatover30millionconsumershadconvertedfromcredential-basedaccess(IDandpassword)tothemoresecure,tokenizedAPIaccess.5Likewise,FDXleaderssuggestnetworkeffect-ledgrowthfromopenbankinguseisimminentinthe

US.TwoadditionalforceshavesupportedthegrowthofopenbankinginNorthAmerica:USconsumerdemandandincreasedregulatoryclarity.Intermsofconsumeruse,Visanotesthat87%ofUSconsumersareusingopenbankingtolinktheirfinancialaccountstothirdparties,howeveronly34%areawarethattheyareusingthe

technology.6280%Accounttoaccountpaymentswhichrepresent45%ofallelectronicpaymentsaregrowing280%year

overyearinthe

UK.TrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeOpenBankingontheRiseinNorth

America6Sowhileopenbankingadvancesarebroadlyconsideredmarket-driven,patchworkregulatoryframeworksandeducationalinitiativesmaybeslowingadoption.InCanada,theexpectedestablishmentofacountry-wideopenbankingregimeremainsdelayed.Shouldtheseforcesreverse,moreinnovationcouldquickly

emerge.Still,activitiesfromindustryvanguardspointtoopenbankingmomentum.Mastercardrecentlyintroduced

smallbusinessestoitsopenbankingplatformwhichprovidesadvancedanalytics.Whenbusinessownersgivepermis-siontoaccesstheirfinancialdataviaopenbanking,lenderscanuseMastercardAPIstoapplycashflow,balance,andpaymenthistoryanalyticsto

transactions.Withimprovedinsightsonliquidity,revenue,cashflow,anddefaultrisk,lenderscantailorofferingsandSMBswithmorecompetitivegrowth

financing.Importantly,thissignifiessupplyanddemandmomentumbehindanexpandingrangeofspending,financing,andpayment

tools.Inconjunction,banking-widesystemimprovementslikeFedNow?,theFederalReserve’sinstantpaymentservice,haveallowedfinancialinstitutions

ofvaryingsizestodevelopinnovativesolutionsthatcanbepersonalizedanddata-driventoultimatelydeepencustomerrelationshipsandstrengthenbrandloyalty.FedNow?Launchand

ImpactTowardsthemiddleof2023,theUnitedStatesFederalReservelaunchedtheFedNow?

Service

tomodernizethenationalpaymentsystemandenablefaster,moreefficient,andmoresecuredomestic

transactions.Theinstantpaymentinfrastructureisavailable

toUS-baseddepositoryinstitutionsandallowsindividualsandbusinessestosendinstantpaymentsthroughinstitu-tional

accounts.WhiletheRTPnetwork

wasmadeavailableacrosstheUSpriortoFedNow,thelattersupportsawarenesseffortsandhelpsgrowadoptionofreal-timepaymentsystems.Asadoptionandimplementationexpands,weanticipateameaningfulreshapingoftheUSfinancial

landscape.Withthisprogress,financialinstitutions,fintechcompa-nies,andotherstakeholderswillhavetheopportunitytocreatenewproductsandservicesthatmaximizethereal-timecapabilitiesofferedthrough

FedNow.“Inthenextyear,wearelikelytoseethenetworkingeffect—‘everyone’sonitbecauseeveryone’sonit’—begintomanifestitselfinNorth

America.”DonCardinal,ManagingDirector,

FDXTrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeOpenBankingontheRiseinNorth

America7ExaminingtheBenefitsofReal-TimePaymentswith

FedNow7Ascustomerexpectationscontinuetorisealongsidetechnologicaladvances,depositoryinstitutionsandtheirserviceproviderscanbuildonthiscapabilityandintro-ducevalue-addedservicestotheir

customers.8Some25%offinancialinstitutionssaidtheywerewaitingforFedNowtodeploybeforefinalizingareal-timepay-mentsstrategy,butmajorplayersinthepaymentsspacestillhaven’tmovedonadoption.9Takingapassiveapproachtoinnovationcouldbedetrimentaltoaninstitu-tion’scompetitivestanceasfintechsfillthegapswithmoreadvancedofferingsandglobalmarketsleverageprogres-sive

solutions.FedNowwillalsoleveragetheISO20022messagingstandard,whichisdesignedtobecompatiblewithfutureiterationsoftheinstantpayments

infrastructure.“TheFederalReservebuilttheFedNowServicetohelp

makeeverydaypaymentsoverthecomingyearsfasterandmoreconvenient.”JeromePowell,Chair,BoardofGovernors,Federal

ReserveWhatarethe

corebenefits?Howwillfinancial

institutionsbe

impacted?Whatarethe

potentialmacro

effects?Enhanced

accessibility:Smallbusinesses,corporatesandconsumerswillbeabletoaccessinstantpaymentsacrossdomesticinstitutionsthatareparticipantsof

FedNow.Smallbanksandcreditunionswillbeabletoprovidereal-timepaymentservicestotheircustomers.Enhancedaccessibilityimprovesfinancialserviceofferingsforeveryoneinvolvedwhichcanhavealastingimpactonfinancialinclusion.Enhancedglobal

competitiveness:Real-timedomesticpaymentsenableUS-basedbusinessestooperateon

parwithothersintheglobal

marketplace.Customerswillbecomeaccustomedtoreal-timedomesticpaymentsandlikelyexpectthesamefrominternationaltransactions,puttingpressureonfinancialinstitutionstooffermoreefficientcross-borderpayment

services.GDPisexpectedtoincrease

by$173billionwith$184billioninsavingsforconsumersandbusinessesasreal-timepaymentstake

shape.Improved

efficiency:Paymentspeedandsettlementtimeswillimprovedramatically.Institutionswillneedtoinvestin

improvedtechstackstosupportthedemandgeneratedbyreal-time

payments.Financialagilitywillincreaseforbusinessesandconsumersalikeasbarrierstostream-linedcashfloware

reduced.Supportfor

innovation:Real-timepaymentswillincreaseend-userexpectationsandpushthefinancialservicesindustryto

progress.Financialserviceproviderswillneedtodeveloporadoptsolutionsthatleveragethereal-timecapabilitiesof

FedNow.Newdevelopmentscouldincludeinnovativepaymentapps,integratedpaymentsolutions,expandeddataanddirectoryofferings—alltoserveasuperiorpayment

experience.TrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeOpenBankingontheRiseinNorth

America8ISO20022Goes

LiveISO20022servesasauniversallanguagetomoreefficientlysharefinancialdataacrosstheglobe.Themessagingstandardrepresentstheneedformodernizationandplaysacriticalroleinsupportinginstantpaymentcapabilitiesandexpandingpaymentprocessinnovations.ISO20022isexpectedtobringsignificantchangestohowfinancialservicesareconducted,improvingdataqualityandreducingerrorsacrosscross-borderpaymentflows,whilemakingtransactionsmoreefficientand

secure.10Specifically,ISO20022

offersastructured,data-richcommonlanguageforcorporatesandbankingsystems.Thisisnecessarytomoveawayfromend-of-daybatchfilepaymentsprocessingtoreal-timeprocessing.Thestan-dardmayalsoprovidebetteranalyticsusingmorerobustdataelements,whichcouldbolsterfinancialinstitutionsingeneratingnewservicesandproduct

offerings.Forcorporatesandfinancialinstitutions,ISO20022adoptionwillboostoperationalefficiencies,includingtheabilitytoexchangedetailedremittanceinformationwithacustomerpayment.Inaddition,itaddssupportforstraight-throughprocessingandareductioninerrorsandmanual

processing.11GrowingadoptionoftheISO20022messagingstandardandtheopportunityforhighlystructureddatahasledtheFederalReservetoincorporatetheframeworkintoitsFedNow?service.AccordingtotheFederalReserve’sbankservicesgroup,thisstandardwillbeabletosupportFedNowasitevolvesandadds

capabilities.12FastFacts:ISO

20022Aninternationalstandardforexchangingelectronic

messagesOffersstructured,richdatausingXML

syntaxThisformatisalreadyinpracticeforreal-time,low-valueandhigh-valueclearingsystemsaroundthe

world.Offersricherreferencesandimprovedremit-tance

informationRequiresplanningahead:multi-yearprojectforfinancialinstitutionstoimplementvalue-addedservicestoenhance

experienceSource:JP

MorganISO20022offersastructured,

data-richcommonlanguageforcorporatesandbanking

systems.TrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeOpenBankingontheRiseinNorth

America9MoststablecoinsarepeggedtoafiatcurrencylikeUSDorEUR.Becauseofthis,stablecoinshaveactedasagatewayintousingblockchainanddigitalassetsforpaymentsamongstusersconcernedwithcryptocurrencyprice

volatility.Likemanydigitalassets,stablecoinscanprovidebroad,inclusiveaccesstothefinancialsystem,andenablethefastandefficientmovementofvalue.In2022,fiat-backedstablecoinstransacted$6.87T,eclipsingbothMastercardandPayPalintermsofmovingvalueacross

networks.13Usingstablecoinsforpaymentscombinesthebenefitsofblockchaintechnology—namelygreatersecurity,trans-parency,costefficiency,andspeed—withthetrustandfamiliarityoftraditional

fiat.14Asdemandforstablecoinsgrows,particularlyascashuse

isatahistoriclow,moreindividualsandbusinessesareconsideringtheseassetsaspaymentalternatives.ThenumberofAmericanswhosaytheydidnotusecashtomakeapurchaseinatypicalweekisnow41%,upfrom29%in2018.15Businessownersareincreasinglyfindingtheswitchtostablecoinsadvantageous,notingrisingcon-sumerdemand,fastercheckouts,lowerlaborcostsandincreased

security.16Thetrendtowardsstablecoinuseisdrivenbythebenefitsofblockchaintechnologythataddimprovementovercredit-cardandothertraditionalpayment

types.Astablecoinisatypeofdigitalcurrency

designedtomaketransactingwithcryptomore

practical.GoingCashless:Spotlight

onStablecoinsfor

PaymentsTrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeGoingCashless:SpotlightonStablecoinsfor

Payments10TrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeStablecoinsreducetheroleofmiddlemeninthecurrentfinancialsystemandsupportdirecttransactionsbetweenmerchantsandconsumers,reducingintermediarycosts.Sincestablecoinsarecryptographicallysecure,userscansettletransactionsalmostinstantaneouslywithoutdouble-spendingorotherproblematicsettlementfacilitation.Becausestablecoinsarebuiltondistributedledgertechnology,theyofferprogrammabilitytopaymentsviasmartcontracts

whichcaninspireusefulproductorserviceinnovationandlinkthetraditionalWeb2economywiththefutureof

finance—Web3.Adoptionofnewdigitalpaymentmethodsoffersignificantbenefitstocustomersandsociety:improvedefficiency,greatercompetition,expandedfinancialinclusion,andinnovation.In2023,PayPaljumpedonthestablecointrendandlaunchedPayPalUSD(PYUSD)

astablecoinbackedbyUSdollardeposits,short-termUStreasuries,andsimilarcashequivalents.PYUSDcanberedeemedone-to-oneforUS

dollars.PayPalUSDwasdesignedtoreducepaymentsfrictioninvirtualenvironments,facilitatethefasttransferofvalue,sendremittancesorconductinternationalpayments,enabledirectflowstodevelopersandcreators,andfosterthecontinuedexpansionofdigitalassetsbytheworld’slargest

brands.On-trendwiththerestoftheglobalcryptoindustry,regulationofthisnewassetclasshasalreadybegun

totakeshape.AccordingtoBernsteinresearch,stablecoinregulationisquicklyprogressingacrosstheUS,EU,UK,andAsia,andtendstomeritmorepoliticalsupportthancryptoregulation.TheUSiswitnessingregulatoryprogresswithrecentbipartisansupportforthe'ClarityofPaymentsStablecoinAct'.Ifpassed,thelegislationcouldunlockstablecoininnovationledbyprivateplayersintheblockchainindustry,allowinganyonewithconsumerdistribution(social,commerce,finance)topartnerwitharegulatedstablecoin

issuer.17$6.87TIn2022,fiat-backedstablecoinstransacted$6.87T,eclipsingbothMastercardandPayPalintermsofmovingvalueacrossnetworks.GoingCashless:SpotlightonStablecoinsfor

Payments1102AsiaPacific:LeadingtheWayin

InstantPaymentsThecombinationofinnovativetechnology,ubiquitoussmartphoneaccess,andfriendlyregulationcementstheAsiaPacificregionasthegloballeaderininstantpaymentsandenableswide-spreadaccesstoreal-timesettlement.Withthevastmajorityofprofitabledigitalbanksbasedintheregion,it’slikelythatthissuccesswillflourishasadoptionofnewfintechmodels

increases.TrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeCountriesacrosstheAsiaPacificregioncontinuetopioneerinstantpaymentdeliveryanddigitalbankinginnovations.Intermsofestablishedglobalfinancialsystems,theregionisrelativelynewtothebankingindustrybuthasgrownadeptatnavigatingdigital-onlyfinancialservices.AsiaPacificishometo10outof13ofthemostprofitabledigital-onlybanks

worldwide.18Theregion’sappetiteforexperimentationwithalternativepaymentrailshasledtobettercross-borderanddomesticpaymentcapabilities,accesstoreal-timesettlement,opportunitiesforfinancialinclusion,andgloballeadershipinfinancialinnovation.Bymanymeasures,AsiaPacificoperatesastheepicenterofdigitalfinance:Theregionishometo20%oftheworld’sdigitalbanks,anditscitizensarethemostenthusiasticadoptersofdigital

payments.19Theregion’sdigitalbankingsectoroutperformsothermarketsinpartbecauseitscultureandprocessesarerootedinacustomer-firstethos.Companiestendtoonlyleveragebankingtechnologies,platforms,andarchitec-turesconducivetoomni-channelcustomerexperiencesanddifferentiateofferingswithproactivecustomer

service.20Sectorparticipantsalsotendtoaggressivelyevaluateandembracerobustusecasesforblockchain,Web3,decen-tralizedfinance,andartificialintelligence,particularlyaroundmobilewalletsandsocialappstofacilitatebetterdomesticandcross-border

payments.DigitalwalletsinAsiaPacific(excludingChina)morethandoubledtheirshareofe-commercetransactionvalueinthelastfiveyears,andthisshareisprojectedtogrowoverthenextthreeyears.Similarly,digitalwallets’shareofpaymenttransactionvalueatpoint-of-salegrew6xinthelastfive

years.21SoutheastAsiainparticularhasexemplifiedexpansiveregionalpaymentsprogress.Withinthemarket,real-timepaymentsnetworkvolumeisexpectedtoreach$2.4trillionby2025—a230%increasefrom2020.Intermsoftechnol-ogyadoption,considerthatover400millionpeopleinSoutheastAsiaalonewillusemobilewalletsby

2026.22APAC’s‘PaymentsFirst’

PlaybookOverthelastyear,APAC’sdigitalbankingparticipantsmadespiritedattemptstocapitalizeonconsumerinterestintransactingabroadbysupportingmore

affordable,real-timemoney

transfers.Forexample,Thunes’partnership

withTencentFinancialTechnologyintroducedwalletandaccountinfrastructureforoveronebillionChineseusersacrossWeixin(interna-tionallyknownasWeChat).Thepartnershipaimstomakesendingmoneyacrossbordersandsendingremittancesaseasyassendinga

message.23AsiaPacificishometo10outof13of

themostprofitabledigital-onlybanksworldwide.TrendsinRegionalPayments:InsidetheEvolvingGlobalPayments

LandscapeAsiaPacific:LeadingtheWayinInstant

Payments13Elsewhere,Asia’sbanksandfintechsarerecastinghowbillionsofconsumersengagewithdigitalfinance,includingsurroundingreal-timepayment

offerings.SingaporeandThailand,forexample,bothlaunchedQRcode-basedreal-timeretailpaymentsystems,PayNowandPromptPay.Malaysia,Indonesia,andThailandnowhaveconnectednetworks.Andin2022,Malaysia,Singapore,Indonesia,Thailand,andthePhilippinessignedadealtointegratetheirQRcodepaymentsystems.AccordingtoACIWorldwide,growingcross-borderQR-codepaymentlinkagesformingbetweenMalaysiaandIndonesia,SingaporeandThailanddriverapidRTP

growth.24Indialauncheditsownreal-timepaymentsplatform,UnifiedPaymentsInterface(UPI),in2016andjustrecentlyeclipsed10billionprocessedtransactions.25UPIallowsinstantpeer-to-peerandperson-to-merchantpaymentsviamobiledevicesandisexpandinginternationallythroughpartnershipsinseveralcountriesincludingSingaporeandtheUAE.UPIisexpectedtosupporttheUS

dollar

tofurtherenhancethemo