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Cash is dying. But it’s not going quietly. Across the globe, instant payments are accelerating financial inclusion, economic activity, and the velocity of money, but adoption remains uneven.

While countries like India and Brazil have embraced real-time transactions, the United States lags far behind – and South Africa finds itself at a crossroads. It has a well-developed fintech sector, yet faces lingering barriers to instant payment adoption, despite officially mandated solutions like Payshap.

Thomas Warsop, president and CEO of global real-time payment software company ACI Worldwide, told Business Times that the impact of instant payments is no longer theoretical. It is measurable.

At its core, instant payments enable money to move faster, freeing economic potential that cash transactions suppress. Warsop, an economist by training, explains the principle through the concept of monetary velocity: “If I have a banknote in my hand, I can only use it once at a time. But if I turn that into a digital transaction, that money can be used multiple times in rapid succession.”

The result? Increased liquidity, heightened economic activity, and financial inclusion for previously underserved populations.

Africa’s economies stand to benefit immensely from this shift. Many consumers on the continent remain unbanked or underbanked, reliant on cash in economies where traditional banking infrastructure has failed to reach them. Instant payments circumvent these barriers by enabling transactions via mobile wallets, leveraging the ubiquity of smartphones. This mechanism has already driven a 15% growth in instant payments across Africa in the past year alone, says Warsop. The trajectory mirrors the explosive success of India’s Unified Payments Interface (UPI), which has become a global benchmark for real-time transactions.

Yet, South Africa presents a paradox. It boasts a sophisticated financial services sector, with fintech firms pioneering innovative payment solutions. But widespread adoption of instant payments has been sluggish. One reason, says Warsop, is that South Africa, like the US, already has “perfectly functional” payment systems, reducing the urgency for change.

While many South Africans marvel at the persistence of antiquated cheque payments in the US, Warsop says that the forces keeping legacy systems alive often defy economic logic. “Consumers are still being incentivised to use cheques because merchants don’t charge extra for them, whereas they do for credit cards. That makes no sense, but it’s a reality.”

South Africa’s payments landscape is facing similar contradictions. While digital transactions are rising, costs remain a deterrent. Services like PayShap, created by BankservAfrica and the Payments Association of South Africa to drive real-time payments, have been criticised for relatively high fees, making them less attractive for low-value transactions.

“Globally costs come down over time as transaction volumes increase,” Warsop says, predicting that South Africa will follow this pattern.

Beyond individual transactions, the broader economic potential of real-time payments is staggering. ACI research estimates that instant payments contributed around $250-billion in incremental global GDP last year. As economies shift from cash dependency to digital transactions, the figure is expected to grow significantly. It goes beyond efficiency. Real-time payments reshape the financial system itself, reducing reliance on intermediaries and lowering merchant costs.

South Africa’s fintech sector presents both opportunity and challenge. The country’s digital banking ecosystem is robust, but fragmentation persists. Many fintech solutions operate in silos, limiting interoperability.

Warsop believes that regulatory alignment and increased cooperation between financial institutions could help unlock the full potential of real-time payments. Cross-border payments, in particular, remain an untapped opportunity, constrained by regulatory hurdles rather than technological limitations.

“At the moment, instant payments are almost exclusively national or regional,” says Warsop. “But over time, we expect regulators to create agreements that allow for seamless cross-border transactions.”

If history is any indication, once the momentum builds, change will come quickly. Cash may not be dying, but its replacement is here.

* Arthur Goldstuck is CEO of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Bluesky on @art2gee.bsky.social.