Bamboo

Menu
Contact Sales

Instant payments: A revolution in real-time money transfers

The way we transfer money is undergoing a radical transformation. Gone are the days of waiting weeks to cash a check or days to process ACH payments. Today, money moves at the speed of a click, fundamentally transforming the way people and businesses manage their finances.

The power of immediacy in modern finance

By offering real-time access to funds, instant payments provide a compelling solution to mitigate financial strain, fostering greater financial resilience and flexibility for users. This innovation redefines traditional money movement, addressing an essential need for immediate access to capital. In fact, recent research indicates that 95% of Americans experience varying degrees of financial stress. Instant payments represent a transformative advancement in digital finance, enabling individuals, businesses, and financial institutions to transfer funds with near-instantaneous speed. 

It is important to distinguish between “instant payments” and “real-time payments (RTP)”. RTP is a specific system administered by The Clearing House, while instant payments is a broader concept that includes several systems and technologies. (1)

It is important to distinguish between “instant payments” and “real-time payments (RTP)”. 


RTP is a specific system administered by The Clearing House, while instant payments is a broader concept that includes several systems and technologies. (1)

Transformation in LATAM

A decade ago, for example, sending money from San José, Costa Rica, required visiting a bank branch, paying considerable commissions and waiting hours or days. Today, that same transfer is done in seconds through SINPE Móvil, the instant payment system (FPS) operated by the Central Bank of Costa Rica. This change exemplifies a broader transformation across the region, where instant payments are improving people’s financial resilience to weather or health emergencies by facilitating rapid remittance transfers and emergency government payments. For companies operating in LATAM, this is an opportunity to deliver value to their customers through accessible, real-time payment options. (2)

Decline of cash and the digital boom

In the Latin American region, cash is rapidly losing ground. Americas Market Intelligence (AMI) reports that, by the end of 2022, cash accounted for only 37% of all formal retail payments in the region’s six major markets, a dramatic decline from 70% in the pre-pandemic era.
This shift is driven by the adoption of technologies such as:

● Contactless cards
● Tap on/to phone technology
● QR codes
● National instant payment systems (2).

This transformation responds to a fundamental need: consumer demand for more secure, convenient and efficient payment methods. The pandemic accelerated this trend, highlighting the limitations of cash in a digital and connected world. Users are looking for speed, traceability and security in their transactions. Bamboo is part of this digital boom, enabling businesses to integrate multiple payment methods designed for customers.

Within this context of digital revolution, Brazil emerges as the undisputed leader of financial transformation in Latin America, thanks to an initiative that has completely redefined the landscape of instant payments in the region. (2)

The Pix phenomenon and its transformative impact

Brazil is leading this transformation with Pix, reaching 31% of electronic transactions being instant by 2022. The system maintains a 6% monthly growth rate through the second half of 2022, and with only 25% of total merchants adopting Pix so far, the potential for expansion is huge.

The Pix story is particularly telling: prior to its launch, virtually 0% of electronic transactions in Brazil were instant.


Its success has been so remarkable that the term “Pix” has become a verb in Brazilian Portuguese (“Te Pixeo!”), demonstrating its deep integration into everyday life. (2)

Tangible benefits and economic growth

Instant payments have proven to be more than just a convenience. Its benefits include:

For consumers:

● 24/7 Accessibility: Continuous availability, unlike traditional ACH systems.
● Improved cash flow: Immediate access to funds for emergencies
● Enhanced financial control: Instant visibility of transactions.
● Reduced costs: Elimination of traditional commissions.

This transformation in the user experience has generated a ripple effect in the financial ecosystem, driving companies to adapt and improve their services to remain competitive. As a result, the business sector has found that the adoption of instant payments meets the demands of the modern consumer, while unlocking new opportunities for growth and operational efficiency.

For companies:

● Monetization: New source of revenue through instant payment services.
● Competitive advantage: Differentiation in the digital marketplace.
● Improved liquidity management: Immediate access to operating funds.
● Risk reduction: Reduced reliance on cash (1).

At Bamboo, we provide solutions that allow businesses to unlock these benefits, giving them the flexibility to offer instant payments while boosting customer satisfaction.

Economic impact and use cases

In 2021, instant payments increased GDP by US$78,000 in 30 global markets. In Latin America, growth is reflected in the number of transactions per capita per month:

● Peru: 3 transactions
● Costa Rica: 12 transactions
● Brazil: 24 transactions

Main use cases:

1. Account-to-account (A2A) transactions.
2. Business-to-business (B2B) payments
3. Peer-to-peer (P2P) transfers
4. Real-time payroll
5. Insurance payments
6. Reimbursements and guarantees (3)

The accelerated future: trends and forecasts

Projections are optimistic: AMI forecasts that instant bank transfers in the region will grow by more than 40% annually through 2026, significantly outpacing overall digital payments growth of 20%.

Regional developments:

● Colombia and Peru develop Pix-inspired systems
● More than 30 instant payment systems in development
● Visa and Mastercard roll out instant solutions such as Visa
● Direct and Mastercard Send
● Banks increase investment in digital services and integrated finance (2)

Innovation continues: specific sectors

Instant payments are revolutionizing diverse sectors, transforming not only the way transactions are conducted, but also entire business models:

Freelancing and gig economy:

● Immediate access to earnings: Ride-sharing drivers and delivery drivers can access their earnings at the end of each service, eliminating traditional 15-day payment cycles.
● Improved cash flow management: Immediate availability allows freelancers to plan expenses and reinvest in their business without delay.
● Reduced financial stress: Instant access to income reduces dependence on short-term borrowing and improves the quality of life for freelancers.

Insurance sector:

● Immediate claims processing: In cases of medical emergencies or natural disasters, policyholders receive their indemnities in minutes, not days.
● Improved customer experience: Quicker claims payments increase satisfaction and loyalty, with renewal rates up to 25% higher.
● Reduced operating costs: Automating the payment process reduces administrative and manual processing costs by up to 60%.

E-commerce:

● Instant refunds: merchants can refund money immediately, maintaining customer confidence and reducing abandonment rates.
● Increased customer satisfaction: Shoppers receive their refunds within minutes, improving the shopping experience and increasing the likelihood of future purchases.
● Reduced disputes: Speed in refunds has been shown to reduce bank disputes by up to 40% (1).

Challenges and future considerations

Despite significant progress, the instant payment ecosystem faces critical challenges that require attention:

1. Risk and fraud management: Need to implement robust real-time detection and biometric authentication systems.
2. Technical infrastructure: Requirement for systems that guarantee 24/7 availability and microsecond processing.
3. Regulatory frameworks: Adaptation to changing regulations and establishment of unified regional standards.
4. Small business adoption: Need to reduce barriers to entry and implementation costs.
5. Consumer education: Development of digital financial literacy and security awareness programs.

However, the determined commitment of central banks and the private sector, backed by substantial investments in digital infrastructure, suggests a promising future for instant payments in the region. Collaboration between traditional financial institutions and fintech is accelerating the innovation and democratization of these services. (3)

The future is now: the new era of instant payments in Latin America

Instant payments represent much more than just a technological innovation; they are the catalyst for a profound transformation in the Latin American financial system. With projected growth of 40% annually through 2026 and success stories such as Pix in Brazil, which processes 24 transactions per capita per month, we are witnessing a revolution that democratizes access to financial services. The decline in the use of cash to 37% in the region’s main markets, from a historic 70%, confirms that instant payments are not a passing trend, but the new standard in the way we move money. This transformation improves operational efficiency, reduces costs and strengthens financial inclusion and economic resilience in the region.

Find out with Bamboo how our real-time payment solutions can transform your business: from optimizing your cash flow to a better customer experience. The future of finance is now.

Related Article