While the Middle East has a nascent real-time payments market, it is about to see the sector take off, according to the latest report by industry experts ACI Worldwide.
The region is “uniquely placed to rapidly capitalise on the productivity and efficiency gains, as well as the economic benefits that real-time payments provide,” states the third edition of Prime Time for Real-Time, a report published by ACI Worldwide, in partnership with GlobalData and the Centre of Economics and Business Research (Cebr).
The senior vice president, Middle East, Africa and South Asia, ACI Worldwide, Santhosh Rao, said: “The Middle East is on the cusp of a real-time payments revolution; the region has an incredible opportunity and the momentum to drive economic growth and financial inclusion with real-time payments.
“The Middle East has shown that it has the appetite to embrace innovative technologies, and drive change and transformation at dazzling speed.”
When it comes to the leading economies in the region, Bahrain’s real-time payments market is a success story — at 34.2 percent, the country recorded the largest real-time share by volume, according to GlobalData.
Rao argued that real-time payments improve liquidity in the financial system and therefore act as a catalyst for economic growth.
Bahrain’s real-time payments system is called Fawri+ and has been in place since 2015.
It has seen a rapid ramp-up in terms of adoption and usage, growing from less than 1 percent of all electronic transactions by volume in 2017 to more than 50 percent of electronic payments volume in 2021.
The 142 million real-time transactions that were made in Bahrain last year resulted in estimated cost savings of $39 million for businesses and consumers.
“As our research reveals, modern economies depend on real-time payments to boost economic growth, prosperity, and financial inclusion, with central governments worldwide being the primary enabler of these systems,” Rao added.
But he said that banks must reinvent their mission-critical operating systems to compete in the new real-time, cloud-first and data-centric business environment.
Owen Good, Head of Advisory, Centre for Economics and Business Research, explained how important real-time payments are for fast-paced and digital-led gig economies.
“For example, workers are paid quickly, allowing them to better plan their finances, while instant payments allow businesses to be more flexible and reduces the need for burdensome cashflow management,” he said.
“By allowing for the transfer of money between parties within seconds rather than days, real-time payments improve overall market efficiencies in the economy.”
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