Citi: Real-Time Payments set to Boost Global GDP by US$286bn

Real-time payments are approaching a tipping point that could reshape the global financial system and unlock hundreds of billions in economic value, according to a new Citi report. 

The study, titled "Real Time 24x7 Finance in an Always-On World", suggests instant payment systems could generate US$286bn in additional GDP by 2028, with fintech companies positioned to capture significant market share from traditional banks.

The transformation is already underway. More than 80 markets now operate real-time payment systems, processing 266 billion transactions in 2023 alone - a 42% increase from the previous year. 

Citi's research indicates this figure will reach 575 billion transactions by 2028, representing a compound annual growth rate of 16.7%.

"The financial services industry is undergoing a profound transformation, driven by the convergence of real-time technologies, evolving client expectations, and a rapidly changing global landscape," says Shahmir Khaliq, Global Head of Services at Citi. 

"Success in this new era requires a commitment to innovation, collaboration, and a client-centric approach."

The economic impact extends far beyond transaction volumes. Research by the Centre for Economic and Business Research, cited in Citi's report, indicates that real-time payments could enable 167 million previously unbanked individuals to open accounts by 2028, with particular benefits for women, young people and low-income populations. 

The systems are projected to generate US$246bn in aggregate savings for businesses and consumers over the same period.

Citi says the shift carries particular significance for emerging markets, where instant payments are driving financial inclusion at unprecedented scale. 

Brazil's Pix system now serves 75% of the population, while India's Unified Payments Interface powers 83% of the country's digital payments. 

In Kenya, M-Pesa helped raise financial inclusion from 26% in 2006 to 85% in 2024, with studies showing the system lifted 2% of Kenyan households out of poverty.

Fintech disruption accelerates

Fintech companies are capitalising on this infrastructure shift to challenge established players across multiple fronts. 

A 2024 survey by Citi Treasury and Trade Services found that fintechs expect to gain approximately 10% market share from banks in cross-border payments over the next two to five years.

The competitive dynamics reflect fintechs' structural advantages in the real-time economy. Unburdened by legacy systems, these companies can quickly adopt instant payment rails to deliver seamless customer experiences. 

Citi's report highlights how they are creating products that leverage real-time transaction data for personalised credit options, automatic bill-splitting services, and just-in-time payroll systems that traditional banks struggle to replicate without extensive infrastructure overhauls.

Banking-as-a-service models and embedded finance platforms are shifting industry revenue away from traditional fee structures toward API-driven services. Fintechs are integrating financial services directly into non-financial platforms, from e-commerce sites to ride-hailing applications.

Debopama Sen, Head of Payments at Citi Services, frames the challenge clearly: "This transformation is not simply about faster payments, it is about gaining a strategic advantage through instant movement of money, empowering faster decision-making, enhanced customer and employee experiences, and more agile financial operations."

Traditional financial institutions face mounting pressure to respond. Citi says the technology requirements extend far beyond updating payment rails to encompass complete operational restructuring. 

Banks must modernise backend processing systems, customer-facing channels, and compliance frameworks to support 24x7 availability.

Real-time liquidity management represents a fundamental departure from established practices. Traditional end-of-day settlement processes become inadequate when transactions occur continuously across time zones. 

The report emphasises that financial institutions need robust systems to monitor and optimise liquidity positions in real time, requiring tighter integration between treasury, risk, and operations teams.

Current limitations in real-time gross settlement systems, which typically do not operate around the clock, create additional complexity for settling instant transactions outside business hours.

Seven RTGS systems already operate 24x7, with 18 more planning to extend operating hours within five years, according to the Committee on Payments and Market Infrastructures cited by Citi.

Cross-border challenges persist

While domestic real-time payments gain traction globally, Citi's analysis suggests cross-border instant settlements face substantial technical and regulatory hurdles. 

Several high-profile initiatives have encountered setbacks that illustrate the complexity of connecting disparate national systems.

The Nordic P27 project, launched in 2018 to create unified real-time payment infrastructure across Denmark, Sweden, Finland, and Norway, was discontinued in 2023. 

Despite close regional ties and shared regulations, diverging national priorities, legacy infrastructure constraints, and compliance challenges proved insurmountable. 

The merger of Denmark's MobilePay and Norway's Vipps into a competing platform further complicated integration efforts.

Similarly, the Immediate Cross-Border Payments initiative, a collaboration between The Clearing House, EBA Clearing and Swift, aimed to connect the US RTP and Europe's RT1 systems for real-time dollar-euro payments. 

Despite initial progress and successful pilots, regulatory alignment, technical interoperability, and differing stakeholder priorities ultimately led to its discontinuation.

Project Nexus, involving India, Malaysia, the Philippines, Singapore and Thailand, represents a more promising approach to achieving cross-border interoperability. 

The initiative aims to standardise connections between domestic instant payment systems, though implementation timelines remain uncertain.

Europe is implementing mandatory instant euro payments through the Single Euro Payments Area regulation. Eurozone payment service providers must now be capable of receiving instant payments, with sending capabilities required by October 2025. 

Over 2,700 payment service providers have joined the scheme, representing 78% of European providers and over 89% in the eurozone.

In the United States, momentum is building following the Federal Reserve's launch of FedNow in 2023. The service processed 1.3 million transactions in the first quarter of 2025, marking a 43% increase over the previous quarter. 

Total transaction value reached US$48.6bn, up 141% year-on-year from US$38.2bn recorded for the entire previous year.

Ashish Bajaj, Global Head of Financial Institutions & Correspondent Banking at Citi, observes the shifting landscape: "The U.S. real-time payments landscape is on the cusp of a major transformation. The groundwork has been laid, and we expect rapid growth of real-time payments in the coming years."

Security threats intensify

The speed and finality of instant payments create new vulnerabilities that criminals are exploiting with increasing sophistication. 

Fraudsters can now move funds across accounts or jurisdictions in seconds, leaving minimal opportunity for traditional intervention mechanisms. 

Global losses to scams reached an estimated US$1tn in 2024, with real-time payment systems potentially amplifying these risks due to their irrevocable nature.

Citi's report warns that Authorised Push Payment fraud represents a growing concern, particularly in mature instant payment markets. 

These scams involve deceiving victims into authorising legitimate payments to fraudulent accounts, often through romance scams, fake invoices, or fraudulent investment opportunities. In the UK, such fraud accounts for nearly 40% of all payment-related fraud.

The integration of artificial intelligence into criminal schemes adds another layer of complexity. 

Fraudsters are deploying deepfakes and sophisticated social engineering attacks that can convincingly impersonate trusted individuals to deceive victims into authorising transfers. Nearly half of global consumers now report experiencing scam attempts at least once weekly.

Financial institutions are responding by developing real-time fraud detection systems that can analyse transaction patterns and flag anomalies within milliseconds. 

However, the challenge lies in balancing speed with security without creating friction that drives customers to competitors.

Citi suggests corporate treasurers face their own adaptation challenges in the real-time economy. Instant settlement can unlock working capital trapped in traditional payment delays, with estimates suggesting US$1.5tn sits idle due to processing inefficiencies and cut-off times. 

Companies maintaining three to five days of payables or 5% to 15% of operating cash to meet payment obligations could redirect substantial amounts toward investment or debt reduction.

However, treasury functions must fundamentally restructure to manage liquidity in an always-on environment. Faster changes in cash positions require dynamic forecasting and API-based bank connectivity to optimise fund flows in real time.

Stephen Randall, Global Head Of Liquidity Management Services at Citi, puts this in context: "The 24x7 economy, fueled by real-time payments, presents both opportunities and challenges for liquidity management. 

“While instant payments offer significant advantages, such as enhanced efficiency and strategic agility, they also require a fundamental shift in how liquidity is managed."

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