Real-Time Payments Forecasted to Help Generate 0.32% of GDP by 2026
South Korea has a well-developed real-time payments infrastructure, which was introduced in 1988.
In 2021, the country recorded 7.3 billion real-time transactions, which resulted in an estimated cost savings of $2.0 billion for businesses and consumers. This in turn helped to unlock $8 billion of additional economic output, which represents 0.44% of the country’s GDP.
With real-time payment transaction numbers expected to rise to 11.3 billion in 2026, net savings for consumers and businesses are forecasted to climb to $3.1 billion. That would help to generate an additional $6.7 billion of economic output, equivalent to 0.32% of the country’s GDP. (The expected reduction in economic output generated compared to 2021 reflects a natural decline in the informal sector of the economy, resulting in reduced relative scope for real-time payments to make an impact.)
In 2021, South Korea was the third ranked country for total volume of real-time payments with 6 billion payments volume processed, after China and India. In 2021, real-time payments represented an 18% share of total payments volume, and its share of payments spend was at 80.9%. Real-time payments are thus mainly being used for more expensive transactions than daily expenditures, but with paper-based transactions expected to decline by half, going from 16.2% to 8% between 2021 and 2026, real-time payments are expected to benefit from this change. The transition away from paper-based instruments will also likely bolster spending in general, as has been seen worldwide as share of cash decline.
Real-Time Payment Types
Year of Real-Time
Electronic Banking System (EBS)
The South Korean market is highly proprietary. While real-time payments have been in place for many years, they are domestic in focus, based on legacy infrastructure and therefore non-ISO 20022-compliant. Korea Financial Telecoms & Clearing (KTFC) runs the low-value system and Bank of Korea the high-value system.
Open banking was launched in 2019 and, coupled with the government’s proactive approach to accelerating digital payments adoption, has created a competitive environment for low-value transactions. Banks, fintechs and card companies, along with the major social media businesses, have transformed into PSPs offering a diverse range of services to customers and consumers. Because the latter can, and do, switch easily between PSPs, it is important for legacy players to understand consumers’ needs in creating new services and products.
The COVID-19 pandemic boosted both domestic digital payments and demand for cross-border access to other countries’ payment systems. This means that the next phase in South Korea’s payments modernization journey — cross-border expansion of C2B, B2B and B2C payments — will require an ISO 20022 gateway for South Korea to integrate with the counter countries. Acceleration in cross-border payments should also follow conclusion of the Regional Comprehensive Economic Partnership free trade agreement between ASEAN, Pacific and North Asian countries.
The challenge that payment technology providers face in gaining a foothold in the next phase is posed by the substantial in-house IT arms that South Korean banks and fintechs possess. This gives them confidence that they can develop their own platforms, and makes it imperative that providers make a persuasive argument to justify the cost of what they bring to the modernization table. They can do this by positioning themselves as not only technology providers but also as business enablers committed to facilitating growth in the ASEAN community as a whole. Vendors that are members of the Asian Payment Network, for example, have a broad overview of regional and global trends with which domestic players cannot compete.
Mobile Wallet Trends
% of adults who have a mobile wallet and have
used it in the past year (2021)
Real-Time Total Participants
All Domestic Banks
Electronic Banking System (EBS)
Population Banking Level
Number of debit, credit and
charge cards per adult
Index to global average
F5 Yr CAGR
Payments Fraud Rate
Population who reported being a
victim of fraud in the last 4 years
Top 3 Payment Fraud Types
|% of fraud victims||Trend|
Bank account hacked
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
South Korea is a high-income economy. Alongside Singapore, Taiwan and Hong Kong, it is one of the four Asian Tiger economies, characterized by significant economic growth between the 1960s and 1990s. Today, it ranks as the 10th largest global economy (Cebr World Economic League Table, 2022).
South Korea is one of three countries in the analysis which has lower macroeconomic impact forecasts for 2026. This is driven by a number of factors: The fact that between 2021 and 2026 the share of real-time payments is forecasted to grow relatively minimally at the same time as the share of paper-based payments is decreasing substantially by 2026, and the fact that the relative size of the informal economy is decreasing organically between 2021 and 2026. Combined, the result is that the potential for real-time payments to impact the informal economy in 2026 compared to 2021 is more limited, and as a result the overall impact of real-time payments is reduced. In 2021, net benefits for consumers and businesses of real-time payments hit $2 billion. The largest component of this was net savings through a reduction in the payments float, which unlocks working capital for businesses. Based on 2021 real-time adoption levels, instant payments unlocked a total daily transaction value of $104.1 billion, through reduced float time. This working capital facilitated an estimated $1.2 billion of business output in the same year.
The macroeconomic benefits in 2021 under current real-time payment adoption rates were estimated at $8 billion of economic output, or 0,44 % of formal GDP. This is equivalent to the annual output supported by 120,199 workers. In absolute terms, this economic impact is the third largest across our sample, trailing only China and India.
The large benefits in 2021 may be a result of real-time payments in South Korea dating back to the late 1980s. Real-time payments in 2021 are typically high value, accounting for 80.9% of total spend from just 18.0% of total transaction volumes.
Based on 2026 real-time adoption estimates, consumer- and business-level benefits are forecasted to rise to $3.1 billion. By 2026, it is estimated that 0,32 % of economic output, $6.7 billion, will be underpinned by efficiency savings as a result of real-time payments, equivalent to the productive capacity of 90,088 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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