In Kano, Nigeria, a student hops on a bus to meet friends after school. In Bangalore, India, a business owner refills a prepaid cell phone. In Belo Horizonte, Brazil, a football fan grabs a quick bite outside the stadium while waiting for the game to kick off. Unbeknownst to them, they are all integral players in the ongoing instant payments revolution. People have seamlessly embraced various instant payment methods, with NIP in Nigeria, UPI in India, and Pix in Brazil emerging as the standout choices for their daily transactions. 

The numbers tell a compelling story. In 2022, global real-time transaction volumes surged by 63.2%, hitting a record high of 195 billion transactions. Projections indicate that this figure will soar to 511.7 billion by 2027, reflecting an impressive compound annual growth rate of 21.3%. By 2027, it is anticipated that real-time payments will constitute 27.8% of all electronic payments worldwide, a substantial increase from the 18% observed in 2022, per ACI Worldwide's report It's Prime Time for Real-Time 2023. 

"Pix is considered UPI's young brother," says Paula Bellizia, President of Global Payments at EBANX. "The Brazilian solution was launched three years ago and it is not too much to say that it is literally everywhere now." Brazil already accounts for 15% of all instant payments made worldwide, second only to India, according to ACI Worldwide. Data from Payments and Commerce Market Intelligence (PCMI), for EBANX, projects that nearly a third (29%) of the total value transacted on digital commerce in Brazil this year will happen through Pix. 

And just like India inspired Brazil, Pix is now spreading the idea of instant payments across Latin America. They are available at any time, they are cheap and, by definition, they are fast, but, according to Lindsay Lehr, Managing Director at PCMI, there are other reasons to explain why instant payments are becoming so popular in the region: "Despite the fact that most Latin Americans now own a bank account, the credit card penetration is still low. Instant payments are covering this gap and also replacing cash. Consumer behavior changed during the Covid-19 pandemic, and people now prefer digital payments." 

According to ACI Worldwide, instant payments in Latin America should grow from 33bi transactions in 2022 to 323.8bi in 2027. "Payments are the backbone of digital growth," says Paula Bellizia. "They become a bridge for digital and financial inclusion, bringing everyone into the digital economy. This access unfolds seamlessly into instant payments, with mobile phones serving as the primary tool, enhancing overall convenience." In 2020, instant and real-timepayments had only a 16% share of digital commerce in LatAm. PCMI expects that this will increase to 34% in two years from now. 

With more customers in the digital economy, global companies are seeing the opportunity to leverage alternative payment methods and increase their revenue, especially in rising markets like Latin America. EBANX's annual report Beyond Borders shows that, on average, APMs already accounted for 39% of the e-commerce volume in the region in 2022, and are expected to represent 42% of it by the end of this year, with Colombia (50% forecast) and Brazil (49% forecast) as the main highlights. Offering alternative payments is an effective way to gain consumer's trust and raise the average order value (AOV). "Take Brazil as an example: Pix became the favorite payment method. If you are selling products or services to the customers there, you have to give them this option," says Juliana Etcheverry, Director of Strategic Payments Partnerships at EBANX. 

Keeping Brazil as an example, it is interesting to understand how instant payments can evolve as a product and also in the way people are using it. Three years ago, Pix was mostly a solution for person-to-person (P2P) transactions. According to the Brazilian Central Bank, only 6% of the transactions were related to paying bills or purchasing products or services (P2B) at that time. The scenario is very different now: P2B transactions via Pix represent 34% of the total volume. Some new features like "Pix automático" (or "Auto Pix") - a solution that will enable recurring payments - are already in the roadmap and should make the method even more interesting for P2B transactions. 

As Pix transforms the way Brazilians conduct transactions and inspire a broader Latin American embrace, there are new potential opportunities on the horizon, such as enabling cross-border payments. The President of the Central Bank of Brazil, Roberto Campos Neto, said recently that Brazilians are already using Pix to pay for products when traveling abroad. Here, again, there is probably some inspiration coming from Asia, where cross-border payments are already happening under international deals.