Real-time payments expansion (global, with regulatory support like PSD3, FedNow)

 

Real-Time Payments Expansion Is Reshaping Global Finance — Here’s What You Need to Know

From Cash to Code: A Tanzanian Farmer and the Global Race for Instant Payments

Picture this: A maize farmer in Arusha sells her harvest via mobile to a buyer in Rotterdam. The payment hits her digital wallet before her son finishes his morning tea. No middlemen. No three-day delays. No Forex guesswork. Just clean, real money in real time.

This isn’t fintech fantasy — it’s the quiet revolution sweeping the globe under the banner of real-time payments (RTPs). From the U.S. Federal Reserve’s FedNow launch in mid-2023 to Europe’s push toward PSD3, the global payments infrastructure is undergoing a radical rewiring. And for cross-border corridors — especially Africa-Europe — this changes everything.

At PAA Capital, we’ve watched this evolution unfold from our base in Gaborone to our SWIFT corridors in Frankfurt and Nairobi. Real-time payments aren’t just speeding up transactions — they’re rewriting the rules of liquidity, compliance, and customer trust.

So, what exactly is powering this expansion, and where do the new rules — like PSD3 and FedNow — fit in? More importantly, how should banks, EMIs, and compliance leaders prepare?

What Are Real-Time Payments, Really?

Let’s cut through the buzz. Real-time payments (RTPs) are digital financial transactions that are instantly cleared and settled — typically under 10 seconds — 24/7/365. That’s every day, every hour, with no bank holidays in sight.

Unlike traditional ACH or wire transfers that batch transactions and settle during banking hours, RTPs are “always on.” They enable the immediate exchange of value between individuals, businesses, and institutions, with payment confirmation in seconds.

This is not just about speed. This is about liquidity liberation, cost reduction, and risk minimization. And increasingly, thanks to emerging regulation, it’s about compliance-by-design.

The Regulatory Catalysts: PSD3, FedNow & Beyond

Europe: PSD3 + Instant Credit Mandate

In 2025, the European Union’s Payment Services Directive 3 (PSD3) — set to replace PSD2 — is tightening the screws on legacy finance and opening the doors to open banking 2.0. Among its most seismic shifts?

• Mandatory instant credit transfers in euro for all EU payment providers
• Enhanced strong customer authentication (SCA) for real-time rails
• Expanded licensing & AML requirements for VASPs and fintechs

PSD3 is turning instant payments from an optional offering into a regulatory obligation. For African PSPs operating through EU-based correspondents or e-money issuers, this has enormous ripple effects.

United States: FedNow — A Sleeping Giant Awakens

After years of playing catch-up, the U.S. Federal Reserve launched FedNow in 2023 to enable real-time clearing and settlement between U.S. institutions. Despite initial caution, adoption has accelerated:

• Over 500 banks and credit unions onboarded by Q3 2025
• Daily volume surpassing 2.2 million transactions (Federal Reserve, Sept 2025)

With FedNow, the U.S. joins the likes of India (UPI), Brazil (Pix), and the Eurozone in supporting real-time, API-based, open-ecosystem payments. For fintechs linking Africa to the U.S. market, FedNow presents both a technical opportunity and a compliance challenge.

Global: ISO 20022 & Interconnected Infrastructure

A quiet but powerful enabler of real-time payments is the adoption of ISO 20022, a global messaging standard that enhances data richness and compliance granularity. As of 2025, over 80% of high-value payment systems across 70+ countries have migrated or are migrating to ISO 20022 (SWIFT, Oct 2025).

This shared language is enabling interoperability between regional systems — think FedNow + TCH + SEPA Instant + Singapore FAST — paving the way for global RTP corridors.

Why Real-Time Payments Matter — Especially for Africa-Europe Corridors

At PAA Capital, our vantage point between Africa and Europe uniquely highlights why RTP expansion is more than a technology story — it’s socioeconomic infrastructure. Here’s why:

• Liquidity acceleration: SMEs in Ghana or Botswana can reinvest payments received in seconds, not days.
• Cost slashing: RTPs can undercut traditional SWIFT or wire fees by up to 60% (World Bank Remittance Report, 2024).
• Cross-border harmonization: ISO 20022 + APIs reduce friction and compliance overhead for regulated institutions.
• Financial inclusion: The unbanked and underbanked can leapfrog into real-time digital systems via mobile money and virtual accounts.

In short: RTPs don’t just serve banks — they empower ecosystems.

Challenges: Faster Isn’t Always Simpler

But let’s not sugarcoat it. Real-time also means real-risk. Instant payments require instant compliance — and that’s where things get tricky.

• Fraud vectors rise when settlement is irrevocable and immediate
• Sanctions screening must evolve to sub-second decisioning
• Liquidity management becomes more complex for treasurers and PSPs
• Regulatory divergence across jurisdictions complicates integration

For firms like ours — with African licensing and EU correspondent relationships — this means building compliance orchestration layers that work across RTP schemes and time zones.

Best Practices for RTP Readiness

If you’re a compliance officer, fintech CEO, or bank executive asking “What now?” — here’s a pragmatic blueprint:

1. Embrace ISO 20022 — Now

Don’t wait for mandates. ISO 20022 enables better KYC/KYB, facilitates fraud detection, and strengthens reconciliation. Treat it as a compliance enhancement, not a burden.

2. Build Real-Time Risk Engines

Partner with regtechs or build in-house. Your AML, fraud, and behavior analytics must function in real-time — not overnight batches.

3. Harmonize Across Schemes

Whether it’s FedNow, SEPA Instant, or RPP in South Africa, build infrastructure that can abstract and normalize different RTP schemes under one logic layer.

4. Engage Regulators Proactively

Don’t wait for a knock on the door. Engage early with central banks, sandbox programs, and licensing authorities. PSD3, for instance, provides new clarity around VASP operations and cross-border compliance obligations.

5. Optimize for Liquidity

Faster payments shift liquidity risk to the edges. Use smart treasury tools to monitor flow in real time, rebalance across currencies, and avoid idle float.

What’s Next: Interoperability is the Next Frontier

Today, real-time payments are mostly regional phenomena. Pix is great within Brazil. UPI rules India. SEPA Instant thrives inside the EU. But none of these systems talk to each other — yet.

That’s changing.

SWIFT’s recent Payment Pre-validation API pilots, ISO 20022 harmonization, and regional interlinking projects (like ASEAN’s Nexus) are building the scaffolding for a truly global real-time payment network. The winners will be those who integrate early, comply proactively, and build trust at the speed of light.

Conclusion: Instant Is Inevitable — Are You Ready?

The future of payments is measured in milliseconds. From the Maasai herder with a phone wallet to the German importer juggling forex exposures, the expectations are clear: faster, cheaper, safer.

Regulations like PSD3 and systems like FedNow aren’t simply upgrades — they’re declarations. Real-time is no longer aspirational. It’s operational.

At PAA Capital, we view this moment as a clarion call. For banks, fintechs, compliance leaders, and regulators alike, the question isn’t “If?” It’s “How fast can you adapt?”

Bold action begins with clarity. So let us help you build, license, and scale your RTP-ready infrastructure — starting today.

→ Schedule a strategy session with our compliance and payments leadership team