ACI Worldwide — GLOBAL PAYMENT TRENDS — Charting the growth of 'immediate payments'

Real-time payments in Chile have been available since the launch of Transferencias en Línea (TEF) by Centro de Compensación Automatizado (CCA) in 2008. Although, Chile remains a cash-dominated society, the country has made significant progress towards electronic payments supported by the government’s initiatives, an increased banked population and improved payments infrastructure.

The COVID-19 pandemic has now highlighted the importance of electronic payments, further boosting the shift towards digital payments, which has also helped real-time payments to grow over the last few years. The real-time payments volume is further expected to increase at a CAGR of 13.7% from 2021-2026.

Key Stats

Real-Time Payment Types

Single Instance

Initiation/Authorization Methods

Bank Account

Year of Real-Time
Payments Launch

2008

Availability

365

24/7

Message Standard

ISO 8583

ACI’s Take

Early in 2021, the Central Bank of Chile released a draft regulation creating a normative sandbox for modernizing the market’s real-time payment capabilities. The plan is to decentralize the real-time payments operation in order to stimulate competition, and payment providers now have a year to stand up their own infrastructure before discussions begin around how regulation should be applied.

Those who build a solution early will be best placed to define the market’s standards, putting them in a stronger position compared to those who follow later. As such, 2022 is a unique, once-ina-generation opportunity to seize market share and launch new services beyond those currently supported by the country’s aging, first-generation, real-time transfer services.

Ultimately, we expect to see two or three leading real-time payment operators emerge, using their own rails but connected to each other via APIs. Initially banks will connect using their legacy messaging, but they should be careful to ensure that this does not restrict their ability to compete in the future. New service-driven architectures will eventually be required to cost-effectively support interoperability with other schemes, the introduction of new use cases such as Request to Pay and the onboarding of any future developments. They should also pursue ISO 20022 modernization for its long-term benefits around potential inter-scheme integrations (between PIX in Brazil, CCE in Perú, T3.0 Argentina and SPI in Paraguay, for example) for cross-border real-time payments and other regional value-added services.

One of the drivers behind decentralization is Chile’s experience with its legacy real-time payments service, which has been in place for more than 20 years. It is proprietary and operated by a company formed by the banks. Use is declining because of its cost and limited features, so opening up real-time services to greater competition will help to drive down costs and stimulate innovation.

Some of that innovation will come from outside the traditional banking industry. There is no formal open banking initiative in Chile yet, but there have been discussions about how willing the banking sector is to participate. Our recommendation is that they be proactive, taking the lead on open banking to enable more nimble players that can expand their footprint more quickly than would otherwise be possible. These new entrants will come to market with services that are differentiated on price and user experience — there are more advantages to be had from collaborating with them than there are from shutting them out.