A new study commissioned by ACI Worldwide and conducted by the Centre for Economics and Business Research (Cebr) has revealed compelling data indicating that the adoption of instant payments will significantly benefit young adults in the EU, enhancing their financial prospects.
The research, based on GlobalData volume data on instant and electronic payments along with financial inclusion indicators published by the World Bank for 48 countries from 2011-2021, found that for every 5% increase in the volume of instant payments, the number of 15 to 24-year-olds globally who saved money in the last year increased by 15.6% on average.
The volume of instant payments in the EU is expected to surge from 7.6 billion transactions in 2023 to 21.2 billion transactions in 2028, representing a compound annual growth rate of 17.5%. As a result, instant payments as a share of all electronic payments in the EU are projected to increase from 5% in 2023 to 11.1% in 2028.
This news comes against the backdrop of significant financial challenges faced by young Europeans. Eurostat data indicates that 24.5% of people aged 15 to 29 are at risk of poverty or social exclusion, higher than the rate for the total population (21.6%). In January 2024, the EU youth unemployment rate stood at 14.9%, highlighting the economic difficulties faced by young people in the region.
The European Parliament’s endorsement of the Regulation on instant payments in February 2024 is a significant development. The Regulation requires payment service providers to offer customers the possibility of making payments from one account to another within 10 seconds, regardless of the time of day and the member state they are in. This is expected to accelerate the volume of instant payments in the EU, bringing it closer to levels seen in other regions.
Craig Ramsey, global head of real-time payments at ACI Worldwide, commented, “Our research proves that moving money around faster drives economic growth and boosts financial inclusion, which in turn allows those facing the greatest financial pressures to save. Now that instant payments are mandated and expected to grow significantly, young people in the EU will benefit – as will others.”
Ramsey will be discussing these findings at an event titled, “Can instant payments get everyone on-board?” on March 19, coinciding with the expected publication of the final text of the Regulation on instant payments. The event will explore the implications for consumers and businesses, as well as the broader impact on financial inclusion.
