UK GDP increase when its ageing payments infrastructure is replaced with the most recent technology make it possible for real-time payments
- Karl Flinders,Chief reporter and senior editor EMEA
Published: 05 Sep 2022 15: 00
THE UNITED KINGDOM upgrade to its payments infrastructure is likely to add a lot more than 3bn to GDP by 2026, however the potential of real-time payments is a lot bigger.
In accordance with a report from theCentre for Economics and Business Research(Cebr), software firm ACI Worldwide, and Global Data, if theoretically all payments were real-time, UK GDP could possibly be up by 85bn by 2026.
A five-year programme led by retail payments authority Pay.uk, referred to as theUKs New Payments Architecture programme, is modernising the UKs legacy payment infrastructure, promising more choice when it comes to payments options over more traditional payment types such as for example cards. This consists of the increasing option of real-time payments.
Based on the report, real-time payments will add 3.3bn to the UKs GDP by 2026. These payments add more liquidity to economies and generate more economic activity. However, it added that untapped potential is far bigger.
Owen Good, head of economic advisory at theCentre for Economics and Business Research, said: By enabling money to transfer between parties within minutes instead of days, real-time payments can significantly improve overall market efficiencies in theUKeconomy and play a significant role in assisting facilitate growth.
He added that real-time payments improve liquidity in the economic climate that may stimulate economic growth.
Our theoretical modelling suggests the impact of most payments being real-time could add 2.7% to formal GDP by 2026, said Good. However, this in no way suggests there isn’t a location for non-instant electronic payments or paper-based cash payments later on.
Craig Ramsey, head of real-time payments atsoftware supplier ACI Worldwide, said real-time payments will undoubtedly be in the centre of the global payments landscape and may unlock economic growth.
He said that developing nations are receiving before developed countries since they dont have legacy payment systems to cope with. For instance, IndiaandBrazilare forecast to add$45.9bnand$37.6bn of additional GDP by 2026, fuelled by strong real-time payments growth.
Since it stands, emerging countries are at the forefront and so are outpacing developed nations in real-time adoption, growth and the associated economic benefits, said Ramsey. That is largely right down to the agility and flexibility of the modernised payments infrastructure in those countries, and the brand new, innovative payments services which are on offer to consumers and businesses due to it.
He said the united kingdom must modernise its ageing payments infrastructure and embrace the brand new Payments Architecture with open arms when it is to take pleasure from the economic benefits.
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