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

Taiwan was one of the earliest countries to adopt real-time payments. Currently there are two real-time payment schemes operating in the country under Financial Information Service Company (FISC) — a multipurpose funds transfer system that processes a range of electronic fund transfers through several sub-systems. While the Interbank ATM funds transfer system allows customers to conduct various transactions, including fund transfers and payments in real-time at ATMs and via online banking channels, Financial XML facilitates interbank fund transfers between businesses in real time. Despite the availability of real-time payments since 1987, they still accounted for just 7% of the total payments transaction volume in 2021. This can be attributed to limited use cases of current real-time payments and increasing popularity of payment cards and mobile wallets. Future prospects for real-time payments look timid, with real-time volume share expected to reach 9.6% in 2026 as the use cases for real-time payments in the country are still not focused around low-volume, everyday expenditures.

Key Stats

Real-Time Payment Types

Single Instance

Bulk Payments

Scheduled

Initiation/Authorization Methods

Bank Account

Mobile

Year of Real-Time
Payments Launch

2003

Financial XML

1987

Interbank ATM funds transfer system

Availability

365

24/7

Message Standard

Proprietary

ACI’s Take

There is great scope for real-time payments to break through in Taiwan, where cash and credit card usage are widespread and mobile wallet uptake is high. Although the government wants to expand digital payments, low-value payments are still generally cash-based, one reason being merchants’ general resistance to any sort of transaction fee. What low-value payments support that does exist does not comply with ISO 20022 and so does not enable cross-border payments.

However, there are a handful of positive developments in the market including the fact that a number of digital-only banks have launched, with more to come. These banks are likely to invest in creating unique digital payment use cases of which they can take ownership in order to draw market share away from the incumbents (though some of the established banks have been quick to follow suit with digital-only sub-brands). The experiences of markets elsewhere in the region show that, as these players develop services and use cases that respond more directly to consumers’ needs, real-time payments will eventually come to be seen as a more convenient payments option than cards.

Similarly in Japan and China, as consumers and businesses demand cheaper and faster cross-border payments, driving real-time capabilities and ISO-compliance will become more pressing. Indeed, the market relies on SWIFT for cross-border payments today, so banks will be required to be able to send and receive ISO 20022 messages by November 2025.

This change throws into relief the dated XML messaging format underpinning Taiwan’s B2B interbank real-time infrastructure. Banks should take the opportunity of onboarding yet another new payment type to bring low- and high-value real-time payments into a single process. With legacy payment types and messaging formats still needing to be supported, however, it won’t be a simple case of just replacing today’s infrastructure. Instead, they will need to create a hybrid environment consisting of existing, “safe” capabilities and newer solutions consumed as a service from the cloud (or supported in a similar way on premise).