Accelerate payments! This has been the motto for many payment companies and countries this year, whether that be from integrating innovative services or creating instant payment rails to fuel adoption and growth of this burgeoning payment service.
Speaking in-depth on their position at the centre of instant payment growth, Deepak Gupta, EVP of Product at Volante Technologies, reveals some of the countries who have led the way this year when it comes to instant payment adoption.
Gupta also analyses the impact Payment-as-a-Service has had on the African financial sector, the importance of leveraging both domestic and international rails, and Volante’s latest solution that offers more transparency to its customers.
Payment Expert: Firstly Deepak, explain the significance of Volante’s recent partnership with Standard Bank and how important Payment-as-a-Service will be for the bank’s client base?
Deepak Gupta: Our partnership with Standard Bank marks a significant milestone in payment modernisation for the African financial ecosystem, aligning with the global trend of accelerated Payment-as-a-Service (PaaS) adoption.
As a pioneer in this process, Standard Bank is leveraging PaaS to streamline domestic and cross-border real-time, high-value, and bulk payments, reducing complexity, enhancing efficiency, and improving their clients’ experience.
This collaboration supports operational continuity and integrates seamlessly with existing legacy systems, expanding access to modern financial services in underserved communities. The enhanced cross-border payments empower these communities by reducing costs and providing access to broader markets, fostering economic growth and financial inclusion across the region.
For corporate and investment banking customers, this translates into faster and more cost-effective payment processing. PaaS empowers Standard Bank to introduce innovations and adapt to new standards, particularly ISO 20022, which is currently experiencing rapid global adoption.
According to recent reports, countries like Nigeria are already in the top ten of global real-time transaction rankings, surpassing the US, Japan, and Brazil, while Kenya is among the ten countries expected to experience the fastest growth in real-time payments.
The partnership goes beyond technology, enabling Standard Bank to provide an elevated level of service and support for their clients’ growth across Africa. This aligns with the broader industry trend of financial institutions leveraging PaaS to reduce operating costs, accelerate software development, and focus on their core competencies without worrying about payment platform updates or managing digital payments infrastructure.
By embracing PaaS, Standard Bank is positioning itself at the forefront of payment innovation in Africa, setting a precedent for other financial institutions in the region and contributing to the continent’s rapidly evolving electronic-payments landscape.
Payment Expert: How does PaaS help to fuel further growth and acceleration of cross-border payments and how key could this prove to be for Standard Bank clients?
Deepak Gupta: Volante is enabling banks to streamline and expand its payment capabilities across the continent. Notably this includes real-time, high-value, and bulk payments, which can be especially beneficial for customers that need reliable, fast, and cost-effective ways to conduct cross-border transactions.
The efficiency and speed of cross-border payments have long been major pain points for banking clients, especially in Africa. For example, Nigeria and Ghana have grappled with macroeconomic turbulence, marked by foreign exchange complexities, soaring inflation, and continued talent drain across various sectors.
Standard Bank’s adoption of PaaS directly addresses these challenges, offering an improved client experience and operational performance by:
- Enhanced Speed and Efficiency: PaaS enables faster processing of cross-border transactions, reducing delays and improving cash flow for businesses.
- Cost Reduction: The streamlined process leads to lower transaction costs, benefiting both the bank and its clients.
- Expanded Reach: The initiative will soon expand across 18 additional African countries, providing clients with broader access to efficient payment systems.
- Improved Compliance: The transition to ISO 20022 standards, facilitated by PaaS, ensures better data quality and compliance with international regulations.
- Real-time Liquidity Management: PaaS addresses the challenge of intraday liquidity management, a critical aspect for corporate clients
Payment Expert: How important is it for payment service providers to leverage both domestic and international payment services to achieve a wide range of customer satisfaction?
Deepak Gupta: One of the biggest shifts we have seen is the rise of instant payments and cross-border transactions, which are rapidly becoming industry standards. Customers expect payments to be fast, secure, and seamless, both domestically and internationally.
A 2023 PYMNTS Intelligence study found that issuers offering six or more instant payment methods achieved an average Customer Satisfaction Index score of 59.5, compared to just 50.6 for those with two or fewer options. This correlation highlights how diverse payment options lead to higher satisfaction levels.
At Volante, we’re focused on offering solutions that streamline cross-border payments, leveraging real-time data and cloud technology to reduce transaction times, improve security and ultimately, enhance the customer experience.
Payment Expert: What are some emerging markets that have accelerated its adoption of instant real-time payment rails and which markets have been slower in this respect?
Deepak Gupta: India leads in global real-time payments adoption by a significant margin, handling 129 billion transactions in 2023. This exceeds the combined total of the rest of the world’s top 10 real-time payment markets and accounts for nearly half of all global real-time transactions.
If we’re looking at developing countries, South Africa’s digital payments sector is experiencing a remarkable transformation, driven by increased mobile phone adoption, expanding internet penetration, and the accelerated shift towards digital solutions.
The continent has seen explosive growth in mobile money services, with millions of registered accounts, while e-commerce and contactless payments continue to gain traction. In fact, Sub-Saharan Africa leads globally in mobile money adoption, with 28% of adults on average having a mobile money account as of 2022.
These factors have positioned Africa’s electronic payments market for impressive growth in the coming years. The compound annual growth rate for online payment revenues in Africa is projected to exceed 30%, potentially reaching about $13bn in 2025. The continent’s rapid adoption of innovative financial technologies, tailored to its unique needs, is not just bridging financial gaps but also creating new opportunities for economic growth and financial inclusion.
On the other hand, there are markets like Mexico, which was an early adopter of real-time payments in Latin America, launching its Sistema de Pagos Electrónicos Interbancarios (SPEI) system in 2004. However, despite its head start in the region, adoption of real-time payments has been slow due to the region’s high unbanked population and lack of awareness about electronic payments.
Payment Expert: As a member of the US Faster Payments board this year, how have you used your influence at Volante to help accelerate payments within the US?
Deepak Gupta: I’ve served as a Board Advisory Group Member on the US Faster Payment Council for the last year. I work alongside other industry leaders and fellow board advisors to help shape the future of US faster payments and guide the FPC in its mission to facilitate secure, efficient, and ubiquitous faster payments in the US.
Faster payments are at the forefront of innovation in the financial services industry. The US Faster Payment Barometer revealed that the number one challenge of financial institutions in adopting faster payments is lack of ubiquity and interoperability, making it tough for them to transition to true 24/7 operations and generate ROI from their payments modernisation investments.
Having partnered with banks of various sizes to introduce faster payment services in the cloud over The Clearing House RTP and FedNow networks, at Volante, we’re constantly supporting our customers with their payment modernisation processes.
The biggest hurdles banks face in achieving 24/7 operations are system resiliency and interoperability. Many banks run different applications for various payment types, creating a complex ecosystem that’s difficult to maintain and upgrade. When one system changes, others must follow, which complicates testing and increases the risk of errors.
So, here’s what I recommend: don’t go for the Big Bang approach. Bite what you can chew; do it in small pieces. Start with what’s most important for you. Take instant payments for example.
Before tackling bigger systems like wires, work with a partner like us to get your feet wet, and once you’ve got that experience, you can expand from there. This way, you minimise risk, manage your investment better, and still get a great experience without the chaos of a full overhaul.
Payment Expert: Lastly Deepak, and thank you for your time, with the recent launch of Volante Payments Intelligence, how will this solution help companies long-term to accelerate speed to market and enable further transparency?
Deepak Gupta: We’re thrilled about our Volante Payments Intelligence solution, the latest extension to our platform, the Volante Payments Platform. It helps banks understand the ‘why’ behind transactions, offering insights for CXOs, operators, and product managers alike.
It’s a tool designed to offer real-time and historical payment data analysis, providing actionable business intelligence that allows financial institutions to optimise operational efficiency and track performance accurately.
For instance, CXOs can analyse liquidity requirements based on transaction patterns, while product managers can identify customer behaviour, like why certain clients make payments at specific times. By creating personas within the platform, we allow different teams to use the same data set for diverse purposes, offering tailored insights to drive better financial and operational decisions.
By reducing the time banks spend on manual reporting and allowing them to prioritise operational efforts more effectively, Volante Payments Intelligence significantly accelerates the speed to market for new payment products and services. The solution’s seamless integration capabilities and deployment flexibility in cloud environments ensures a quick implementation and immediate results, further enhancing time-to-market advantages.
In terms of transparency, Volante Payments Intelligence offers a comprehensive view of payment operations through advanced dashboards, providing operators, managers, and executives with deeper insights into their overall payments business. This increased visibility enables better risk mitigation, adaptability to market changes, and more informed strategic planning.
