2 PAYMENT METHOD PROFILES: PAY BY BANK
Merchant Cost Considerations Merchant costs considerations for PIX, UPI, and SEPA instant credit are more streamlined than other payment methods. This may reflect the outcomes of government mandating bank participation of the platforms and the subsequent participation for third-party providers. Cost per transaction for instant payments for Brazil and India are under 1% for merchants. Both platforms are government operated and were created with financial inclusivity as a consideration. In Europe and the United States, costs include a nominal fee as opposed to an ad valorem fee only. This may be due to the need for competition with legacy payment systems in Europe and limited issuer participation in the U.S. In Australia, New Payments Platform costs are expected to reach as low as 4 cents in 2025 from 39 cents in 2019. 545
Cost Of Real-Time Payments Analysis 546
Payment Method Largest Market
Estimated Pricing Estimated Volume Estimated Implied Merchant Fees
Pix
Brazil
0.22% 0.30% 0.41%
$484,330,000,000 $1,065,526,000
NPP/PayTo
Australia
$100,000,000,000
$304,800,000
UPI
India
$3,448,693,252,800 $14,017,058,607
TOTAL
0.38% $4,033,023,252,800 $15,387,384,607
Table 2.17
To analyze Real-Time Payment (RTP) merchant fees we have looked at three of the most prominent RTP networks globally: Pix in Brazil, PayTo in Australia and UPI in India. All three networks have comparatively low fees compared to other payment methods, even though there is a very large variation in market size between India and Australia. All three RTP networks have governance structures featuring central banks, which may help explain why economies of scale appear to be reflected in merchant pricing. As with many bank transfer payment methods, PayTo is more commonly accepted through a third-party processor. Hence, to calculate PayTo’s average fees we have added publically available wholesale prices to a published acquirer’s standard mark-up fee of $0.13 per transaction. 547 Of course, this may not be representative of PayTo’s overall fees.
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