Economic Benefits of Real-Time Payments Remain Largely Untapped
Germany recorded 1.2 billion real-time transactions in 2021, which resulted in an estimated cost savings of $313 million for businesses and consumers. This in turn – which helped to unlock $1.4 billion of economic output, representing 0.03 % of the country’s GDP.
With real-time transactions set to rise to 3.4 billion in 2026, – net savings for businesses and consumers are forecasted to climb to $1.1 billion in 2026. That would, helping to generate an additional $3.3 billion of economic output, equivalent to 0.07 % of the country’s forecasted GDP.
That means for the largest economy in the European Union, the economic benefits of real-time payments remain largely untapped. According to the Cebr, the theoretical impact of all payments being real-time could add 3% to formal GDP by 2026. However, these are theoretically modelled modeled benefits; they do, this does not suggest that there is no longer place for non-instant electronic payments or paper-based payments in the future.
Germany adopted the pan-European real-time payments scheme SCT Inst in 2017, which was developed by the European Payments Council (EPC). By integrating it, Germany gained access to a real-time payments scheme that provides euro transfers not only among participating financial institutions in Germany, but also with any European countries part of the eurozone. This integration makes transfers easier between the EU markets, helping boost economic activity. Based on total payments spend, real-time payments had the second highest market share with 1.6% in 2021, and it is expected to grow to 6.8% by 2026. Electronic payments (excluding real-time payments) are the dominant payments tool in Germany.
Despite being available at 1,215 institutions in Germany and being provided by most major banks, real-time payments has have a long way to go before it they can claim to hold a significant share of challenge the overall volume of electronic payments (excluding real-time payments). Future projections for real-time payments are positive as real-time volumes are expected to record a CAGR of 24.1% from 2021-2026, and payments spend will grow at a much stronger CAGR of 38% over the same period. The higher growth in value of transactions on real-time systems indicate that there is still progress to be made towards RTP’s adoption as an everyday means of transaction. Germany is, however, one of the markets where bank transfers (and invoice-based payments, often settled with bank transfers) are strongest within the EU. This, combined with its traditionally cash-dependent consumer base, may make the market more likely to shift to real-time payments for purchases when compared with its peers that are more card-dependent.
Real-Time Payment Types
Year of Real-Time
Germany’s progress towards real-time payments continues along a steady, incremental path. Businesses and consumers remain open to new payment options, and banks are responding — particularly on the corporate side. Here, the initial transaction limit of €15,000, which made real-time payments unviable for businesses, was raised to €100,000. This is still low for larger corporates, but is an encouraging step towards more persuasive, and higher margin, use cases. Another welcome development would be the ability to make bulk payments in real time.
In a further important development, German banks participating in SCT Inst and with TARGET2 accounts will respond in 2022 to a mandated migration to TIPS accounts. This could supersede the currently dominant RT1 scheme, which although SCT Inst-compliant, lacks the reach necessary for universal real-time payments.
With TIPS set to become multi-currency in 2022 when Sweden plugs into the scheme, Germany will expand its real-time payments connectivity beyond its eurozone-centric heartlands. Other non-euro countries are likely to follow, giving TIPS — and therefore German banks — a truly European reach beyond the euro. Throughout 2022, the European Payments Initiative (EPI) will also continue to develop, with German banks among the largest shareholders. Although some of the details around EPI are still unclear, it will stimulate new use cases and is an important factor to monitor.
German banks and institutions are well-positioned to exploit these opportunities, thanks to the substantial modernization of legacy systems and payments infrastructure already undertaken from 2017 onwards. They know they have to invest in TIPS connectivity, and this refresh cycle is a further opportunity to future-proof their infrastructure. For example, prioritizing API-driven architectures will enable them to easily onboard future use cases, including the aforementioned multi-currency transactions. They know too that growth in adoption for real-time will also put pressure on their ability to identify and mitigate fraud, and to manage customers’ identities across multiple channels. This will intensify pressure to advance data and analytics maturity, and accelerate time to production on machine learning applications.
Mobile Wallet Trends
% of adults who have a mobile wallet and have
used it in the past year (2021)
Real-Time Total Participants
Population Banking Level
Number of debit, credit and
charge cards per adult
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Share of Volumes by Payments Instrument
- Paper-based payments
- Electronic payments
- Real-time payments
Real-Time Payments Volume and Its Share in Overall Non-Paper-Based Transactions, 2015-26f
Germany — the European Union’s largest economy — is a high-income country and ranked as the fourth largest global economy in 2021 (Cebr World Economic League Table, 2022).
With its current share of real-time payments adoption, German consumers and businesses benefited from estimated net efficiency savings of $313 million in 2021, which is predominantly driven by a reduction in the payments float. Real-time payments unlocked a total transaction value of $4.8 billion per day in 2021 through a reduced float time. This working capital facilitated an estimated $114 million of business output in the same year.
As of 2021, the macroeconomic benefits of real-time payments in Germany were an estimated $1.4 billion or 0.03% of formal GDP; equivalent to the output of 14,525 workers. In absolute terms, this is the third largest macroeconomic benefit (behind the U.K. and Turkey) across the European countries within the economic impact study.
In 2021, the share of volume for real-time payments was recorded at 2.7%, but this is estimated to more than double to 6.9% by 2026. This robust growth in uptake will result in consumer-and business-level benefits reaching $1.1 billion in 2026. This is forecasted to facilitate 0.07% of formal GDP in 2026, or $3.3 billion of output; equivalent to the output of 31,074 workers.
For Businesses and Consumers
Net savings stimulated by real-time payments
Projected net savings stimulated by real-time payments
of economic output
of GDP facilitated by real-time payments
Projected of economic output
of GDP facilitated by real-time payments
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