A Closer Look at the Growth of Real-Time Payments in Brazil & India

Accessing financial services presents similar challenges for individuals across India and Brazil. This is particularly true for situations when those lacking bank accounts are attempting to make domestic or international transfers.

Fortunately, real-time payments effectively help citizens of both countries to address these challenges, which results in their rapidly increasing adoption. Read ahead to gain a better understanding of these dynamics and learn more about their future prospects!

What Is the Current Situation in India and Brazil Like?

At first glance, it might seem counterintuitive to compare such inherently different payment landscapes, such as India and Brazil. However, it turns out that they have a lot in common.

About 34% of Brazilians lack access to bank accounts, making it challenging for them to conduct online payments. Similarly, in India, about 130 million people do not have bank accounts, which forces them to rely solely on cash.

Such issues particularly disenfranchise local Indian women, who may lack formal identification and access to technology. This is also true for Brazil where the biggest part of the underbanked population is female.

Notably, one reason for the low adoption of traditional financial services in India is the distance from banking services. Even among those who have accounts, over 540 million people have not made any digital payments, while 670 million have made merchant purchases only in cash.

Recent Progress with Real-Time Payments

Despite the complex situation with banking services, India has already made significant strides in the real-time payment space with the launch of the Unified Payments Interface (UPI) in 2016.

UPI has transformed the way payments are made in India, enabling instant and seamless peer-to-peer (P2P) transfers, bill payments, and merchant transactions. The adoption of UPI has been rapid, with over 8 billion transactions with a value of about Rs 13 lakh crore (approximately $169 billion) processed in January 2023 alone.

As for Brazil, the country’s Central Bank launched the Instant Payment System (PIX) in November 2019, which enables instant and 24/7 payments between individuals and businesses. PIX has been well-received locally, with more than 1.3 billion transactions processed in its first year of operation.

Over 60% of Brazilians now regularly use PIX for more than 6 billion transfers worth over $680 billion.

Why Are India & Brazil Actively Adopting Real-Time Payments?

As alternatives to traditional payment services offered by banks and credit card providers continue to grow, digital wallets are becoming increasingly popular for those seeking fast, seamless, and low-cost transactions.

This shift is crucial, particularly for customers in countries with limited banking access like Brazil and India, as the eCommerce market is projected to be worth approximately $7.4 trillion by 2030, with more than $1 billion being transacted across borders.

Benefits of RTPs for Indian and Brazilian Payment Ecosystems

The rise in the adoption of real-time payments in India and Brazil is extremely advantageous for both countries for a number of reasons. Here are some of the key benefits that this tendency yields:

• Modernization of payment systems. India and Brazil's existing payment systems are mostly outdated and inefficient, which can lead to delays, errors, and security vulnerabilities. Real-time payments can help to modernize these systems and provide a more streamlined and secure way to conduct transactions.
• Promotion of financial inclusion. RTPs can help to drive financial inclusion by providing access to financial services to those who are unbanked or underbanked and making it easier and more affordable for Indian and Brazilian individuals and businesses to participate in the digital economy.
• Reduction of cash reliance. Cash is still widely used in India and Brazil, which can make transactions cumbersome and increase the risk of fraud and theft. RTPs can help to reduce these issues and provide a better way to conduct transactions.
• Boost for economic growth. By providing a more efficient and transparent way to conduct transactions, RTPs can help to drive economic growth in India and Brazil. This can be particularly beneficial for small and medium-sized enterprises.
• Improved cash flow for businesses. Real-time payments can help to enhance cash flow for businesses by providing faster and more efficient payment processing, which will lead to improved efficiency and reduced administrative costs.
• Global competitiveness. Real-time payments are becoming increasingly common around the world, and India and Brazil must adopt them to remain competitive in the global marketplace.

With these benefits in mind, it’s safe to say that the future of real-time payments in Brazil and India looks promising.

Will the Growth of RTPs in India and Brazil Continue?

As you now know, real-time payments are experiencing increased traction in India and Brazil, and there is every reason to believe that this trend will continue in the coming years.

These dynamics will be driven by factors such as increasing digitization, the growing popularity of mobile payments, and the convenience and speed offered by RTPs. The regulatory environment and the demand for smooth cross-border transfers will also play a crucial role in shaping the growth trajectory of RTPs in these countries.