13 Billion Transactions Behind: Asia-Pacific Real-Time Payment Interconnectivity Creates Trillion-Dollar Opportunities

Connie Tong
Jun 12
4 min read

Global Payment Revolution Accelerates

2024-2025 has witnessed milestone transformations in global payments. India's UPI system achieved 13.44 billion monthly transactions in March 2024, breaking the 13 billion threshold for the first time; the US FedNow service attracted over 700 financial institutions within one year since its 2023 launch; and the EU's mandatory SEPA instant payment rollout in 2025 will cover 350 million consumers.

This transformation brings enormous market opportunities for financial institutions: McKinsey predicts global cross-border payment revenues will grow from $190 billion in 2022 to $290 billion by 2027, while G20 targets are even more ambitious—achieving cross-border payment costs below 3% and settlement within one hour by end-2027.

Hong Kong: Leveraging Bridge Advantages

Hong Kong's unique geographical position and financial status create significant advantages in real-time payment interoperability. The Faster Payment System (FPS) had 14.49 million registered accounts by end-April 2024, processing 1.456 million HKD transactions daily. In 2023, FPS RMB transactions surged 70%, far exceeding HKD transactions' 22% growth.

Breakthrough developments are accelerating progress. The fast payment system interconnectivity project between the People's Bank of China and Hong Kong Monetary Authority will launch partial services by mid-June 2025, marking cross-border capital flows between mainland and Hong Kong entering the "second-level settlement" era. The first phase opens bidirectional HKD-RMB settlement, with single transaction limits of RMB 80,000 and daily limits of RMB 200,000.

Based on these trends, RMB cross-border transactions in Hong Kong's FPS system are projected to rise from approximately 15% currently to over 35% by 2026. This provides a critical window of opportunity for Hong Kong financial institutions to gain first-mover advantage in the RMB internationalization process.

Singapore: Leading Regional Integration Through Innovation

Singapore has adopted aggressive innovation strategies in real-time payment interoperability. PayNow's internationalization demonstrates strategic foresight: connecting with Thailand's PromptPay in April 2021, India's UPI in February 2023, and Malaysia's DuitNow in November 2023, establishing Singapore's central position in ASEAN's payment ecosystem.

The Monetary Authority of Singapore's regulatory sandbox provides ideal conditions for payment innovation. Swift's tokenized asset pilot project covers over 30 global top-tier banks, with Singapore financial institutions actively participating in CBDC interoperability and tokenized asset transfer exploration. This first-mover advantage will establish a solid foundation for Singapore financial institutions in the next generation of payment technology competition.

Taiwan: Actively Integrating into Regional Networks

Taiwan shows active performance in fintech development, seeking deeper participation in regional payment interconnectivity. With the continuous improvement of electronic payment penetration and growing cross-border business demands, Taiwan financial institutions are seeking breakthroughs in limited international participation space through technological innovation and differentiated services, and Taiwan's market potential cannot be ignored.

Opportunities and Challenges Coexist

Real-time payment interconnectivity brings unprecedented business opportunities for financial institutions: cross-border transaction costs can be reduced by 20-40%, 7×24-hour instant settlement services will reshape customer experience, and traditional businesses such as trade finance and supply chain finance are embracing digital transformation opportunities. More importantly, real-time data flows will provide financial institutions with more precise risk pricing and customer insight capabilities.

However, opportunities come with challenges: Hong Kong financial institutions need to balance innovation and compliance within the "One Country, Two Systems" framework while addressing the liquidity management complexity brought by RMB internationalization; Singapore financial institutions face technical integration challenges involving multiple currencies and standards, requiring a balance between rapid innovation and risk control; Taiwan financial institutions need to seek differentiated competitive advantages through technological superiority and service innovation within limited international participation space.

Forward-Looking Recommendations

Facing the historic opportunity of real-time payment interconnectivity, financial institutions need to formulate forward-looking strategic layouts. Hong Kong financial institutions should focus on strengthening RMB cross-border payment capabilities, proactively deploy payment service networks in Belt and Road Initiative markets, while reinforcing risk management systems to address the complexity of cross-border capital flows.

Singapore financial institutions should fully leverage regulatory sandbox advantages, actively explore API standardization and smart contract applications in cross-border payments, and establish digitalized payment service capabilities covering ASEAN markets. Taiwan financial institutions should seize regional integration trends such as RCEP, seeking maximum market participation opportunities within limited space through technological innovation and compliance optimization.

Key success factors include: establishing real-time data analytics capabilities to support rapid decision-making, building comprehensive risk monitoring systems to address cross-border transaction complexity, and cultivating professional teams with both local market knowledge and international perspectives. Modern Agentic AI-driven financial data analytics platforms, such as COMPASS solutions, provide critical technical support and decision-making assistance for financial institutions during this transformation process through comprehensive functional modules including Pre-Trade Analytics, Transaction Analytics, Portfolio Analytics, and Risk Analytics.

References

European Parliament and the Council of the European Union. (2024). Regulation (EU) 2024/886 of 13 March 2024 amending Regulations on instant credit transfers in euro.
Federal Reserve. (2024). FedNow Service.
Financial Stability Board (FSB). (2021). Targets for Addressing the Four Challenges of Cross-border Payments - Final Report.
Hong Kong Monetary Authority (HKMA). (2024). Faster Payment System (FPS) Statistics.
McKinsey & Company. (2023). Global Payments Report 2023.
Monetary Authority of Singapore (MAS). (2021). Singapore and Thailand launch world's first linkage of real-time payment systems.
Monetary Authority of Singapore (MAS). (2023). Launch of cross-border connectivity between Singapore's PayNow and India's UPI.
Monetary Authority of Singapore (MAS). (2023). Singapore and Malaysia launch cross-border real-time payment systems linkage.
National Payments Corporation of India (NPCI). (2024). UPI Product Statistics.
Swift. (2024). Central banks, commercial banks and market infrastructures advance work on CBDC interoperability.

Disclaimer: This article provides fintech industry insights and analysis. Data presented is sourced from publicly available research reports. Given the rapid evolution of the fintech sector, information may change over time. This content is for reference purposes only and does not constitute investment advice or professional consultation.