Instant Payments To Significantly Boost Finances of Young Adults in Europe
18 March 2024 - 10:01AM
Business Wire
- A quarter of 15 to 29-year-olds in the EU are at risk of
poverty or social exclusioni
- Growth of instant payments could mean many more young adults
will have savings by 2028
ACI Worldwide (NASDAQ: ACIW), a global leader in
mission-critical, instant payments technology, today revealed
striking new data proving instant paymentsii will boost the
financial prospects of young adults in the EU.
New research from the Centre for Economics and Business Research
(Cebr) commissioned by ACI Worldwide shows 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.
According to the latest data, the volume of instant payments in
the EU is expected to rise from 7.6 billion transactions in 2023 to
21.2 billion transactions in 2028. This represents a compound
annual growth rate of 17.5%. As a result, instant payments as a
share of all electronic payments in the EU will increase by 6.1%
(from 5% in 2023 to 11.1% in 2028)iii.
This news comes at a time when young Europeans face serious
financial challenges. Eurostat data shows 24.5% of people aged 15
to 29 are at risk of poverty or social exclusion, which is 2.9
percentage points higher than the rate for the total population
(21.6%)iv.
In January 2024, the EU youth unemployment rate was 14.9%v. Many
young Europeans have been unable to move out of the family home due
to a lack of affordable optionsvi. Meanwhile, some young people in
the region now earn less than their parents didvii.
Importantly, on February 7, 2024, the European Parliament
endorsed the Regulation on instant payments, which the Council then
adopted on February 26. The Regulation requires payment service
providers to offer their 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. Should charges
apply, these must not exceed those applicable for standard credit
transfers.
This will accelerate the volume of instant payments made in a
region that has lagged. ACI Worldwide’s 2023 Prime Time for
Real-Time report shows the share of instant payments among
electronic payments in the EU is significantly behind Africa, Asia,
the Middle East, and Latin America.
“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,” said Craig Ramsey, global head, real-time payments, ACI
Worldwide. “ACI is at the forefront of making instant payments a
reality for businesses and consumers around the world. We are proud
to play our part in improving prosperity and financial
inclusion.”
Craig Ramsey will be discussing these findings at an event
titled, “Can instant payments get everyone on-board?” on March 19,
the same week the Regulation on instant payments final text is
expected to be published. The event will explore the implications
for consumers and businesses, as well as the broader impact on
financial inclusion.
Notes to Editors
Methodology: Cebr research was conducted using GlobalData
volume data on instant and electronic payments along with financial
inclusion indicators published by the World Bank for 48 countries
from 2011-2021. Analysis was conducted using a fixed effects model
with time dummies and a control for the volume of electronic
payments. The statistically significant relationship that a 1%
increase in the volume of instant payments is, on average,
associated with a 3.1 percentage point increase in the share of 15-
to 24-year-olds that have saved any money, all else remaining
equal, was identified.
About ACI Worldwide
ACI Worldwide is a global leader in mission-critical, real-time
payments software. Our proven, secure and scalable software
solutions enable leading corporations, fintechs and financial
disruptors to process and manage digital payments, power
omni-commerce payments, present and process bill payments, and
manage fraud and risk. We combine our global footprint with a local
presence to drive the real-time digital transformation of payments
and commerce.
© Copyright ACI Worldwide, Inc. 2024
ACI, ACI Worldwide, ACI Payments, Inc., ACI Pay, Speedpay and
all ACI product/solution names are trademarks or registered
trademarks of ACI Worldwide, Inc., or one of its subsidiaries, in
the United States, other countries or both. Other parties’
trademarks referenced are the property of their respective
owners.
___________________________________ i Eurostat, Severe material
and social deprivation rate of youth: 6%. ii Instant or real-time
payments are credit transfers that make funds available in a
payee’s account within 10 seconds of a payment order being made.
While the term “instant payments” is used in Europe, the term
“real-time payments” is more widely used in other parts of the
world. iii Data provided by GlobalData, the data analytics and
consulting company. iv Eurostat, Severe material and social
deprivation rate of youth: 6%. v Eurostat, Unemployment Statistics,
January 2024 vi Eurofound, Home ownership declines across EU as
young adults find themselves locked out of market vii Erasmus
University Rotterdam, More and more Dutch people earn less than
their parents
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version on businesswire.com: https://www.businesswire.com/news/home/20240317535213/en/
Media Contacts: Nick Karoglou:
nick.karoglou@aciworldwide.com Katrin Boettger:
katrin.boettger@aciworldwide.com
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