Instant payment

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Instant payment is a new way to exchange money and purchase services in seconds. Compared with wire transfers they allow the transfer of money from the payer bank account to the payee bank account almost immediately, instead of requiring few business days. These payment systems have been developed (and are currently under development) worldwide as the need of faster and reliable transaction is the new economy common requirement.

The Euro Retail Payments Board (ERPB) has provided a widely accepted definition of instant payments, that are: "electronic retail payment solutions available 24/7/365 and resulting in the immediate or close-to-immediate interbank clearing of the transaction and crediting of the payee’s account with confirmation to the payer (within seconds of payment initiation)." [1]


The growth of e-commerce has caused changes in people's spending patterns. Shopping is no longer confined to regular business hours, creating a new challenges for funds transfers.[2] Similarly, merchants require faster and more reliable money transfer systems to keep up with consumer demand.[3]

Traditional electronic payments like wire transfers, that perform the electronic funds transfer within few business days, are not in line with user expectations. It is predicted[by whom?] that in the next year instant payments will become the standard for electronic fund transfers.[4]

Examples of instant payment services[edit]

A non-exhaustive list of systems available today, and in the near future, is the following:[5]

  • Japan, ZENGIN,[6] deployed in 1973;
  • China, IBPS - Internet banking payment system,[7] deployed in 2010;
  • India, IMPS - Immediate Payment Service,[8] deployed in 2010;
  • United States, Zelle,[9] available since 2016;
  • United States, Venmo,[10] available since 2018;
  • United States, RTP - Real-Time Payments,[11] available since 2017;
  • Europe, RT1,[12] available since November 2017;
  • Europe, TIPS - TARGET Instant Payments Settlement,[13][14] available from November 2018;
  • Australia, NPP - New Payments Platform,[15] available since February 2018.

Comparison with digital wallets[edit]

In digital wallet based payment systems like PayPal, Apple Pay, AliPay, WeChat Pay etc. users receive immediate notification of the transaction, but funds are transferred at best in the next business day. The settlement time depends on the underpinning payment method chosen by the customer, while for instant payment systems, the funds are transferred within seconds or minutes.

See also[edit]

External links[edit]


  1. ^ "Instant payments definition". European Central Bank. 2017. Retrieved September 8, 2018.
  2. ^ "Digital transformation of the retail payments ecosystem" (PDF). Banca d'Italia. November 30, 2017. p. 3. Retrieved September 2, 2018.
  3. ^ "What are instant payments?". InstaPay. 2018. Retrieved September 2, 2018.
  4. ^ "Instant payments are the future - here's why". Nordea. 2018. Retrieved September 2, 2018.
  5. ^ "Instapay Tracker". InstaPay. 2018. Retrieved September 2, 2018.
  6. ^ "Zenging system". Japanese Bank’s Payment Clearing Network. 2012. Retrieved September 2, 2018.
  7. ^ "Payment, clearing and settlement systems in China" (PDF). Bank for International Settlements. 2012. p. 24. Retrieved September 2, 2018.
  8. ^ "Immediate Payment Service - Frequently Asked Questions". State Bank of India. Retrieved September 2, 2018.
  9. ^ "Introducing Zelle". Early Warning Services LLC. 2018. Retrieved September 2, 2018.
  10. ^ "Send money and make purchases at approved merchants". Venmo. 2018. Retrieved September 8, 2018.
  11. ^ "RTP". The Clearing House - RTP. 2018. Retrieved September 2, 2018.
  12. ^ "EBA CLEARING's instant payment activities". EBA Clearing. 2017. Retrieved September 2, 2018.
  13. ^ "TARGET Instant Payments Settlement" (PDF). European Centeal Bank. February 9, 2017. Retrieved September 2, 2018.
  14. ^ Karen Birkel; Lorenzo Giammò (December 13, 2017). "TARGET Instant Payment Settlement" (PDF). European Central Bank. Retrieved September 2, 2018.
  15. ^ "New Payments Platform". reserve Bank of Australia. 2018. Retrieved September 2, 2018.