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I have taken only a numeric view in this blog, and haven't considered the nature of the underlying transactions - whatever people are using bitcoin for, their use for it is growing.

However, check out this infographic - it claims bed sheets are the most popular item purchased with bitcoins!

http://www.coupofy.com/blog/bitcoin-is-switching-from-investment-commodity-to-everyday-use 

These figures show Paym transaction volumes growing at about 40% per quarter, or ~270% per year, which is impressive. Extrapolating forward at this rate, transaction volumes will hit one billion txns p.a. within five years - at this point Paym will be as mainstream in the UK as contactless card transactions are today.

Exrapolating payment volume growth like this, in my experience tends to work, I assume due to network effects. UK contactless card transactions are a case in point - they had a slow start at launch in 2008, but in fact have been growing at up to 200% - 300% p.a. consistently since. They could easily reach one billion transactions this year, and even if growth slows, two billion UK contactless card transactions are feasible next year.

For Paym, it is easy to see what will drive this growth: the dramatic growth in mobile banking (where banks tend to put Paym functionality), and the Faster Payments Scheme opening up access to its infrastructure to both bank and non-bank PSPs - this allows direct technical connection to FPS, hence access to guaranteed real-time payments which are core to the Paym proposition. Imaginative uses of Paym in all sorts of apps and services are sure to follow. Paym has a bright future.

You are right to conclude that real-time payments are a big undertaking for Europe to implement, it will take time and a lot of change. However, I have different perspectives on some of the points raised:

1. The UK Faster Payments system is real-time (<<5s) for customers of the 10 banks (and one sponsored PSP) that connect directly to the Central Infastructure, for the single immediate payment (SIPs) type. These PSPs cover most of SIP volume. FPS is architected for real-time, and operates real-time 24x7, including synchronous processing for real-time confirmations.

2. The UK experience has shown the importance of real-time availability of funds for consumers and SMEs - a payment guarantee is a much inferior proposition compared to a real-time payment for both payer and payee.

3. Real-time settlement is an unusual concept for mass domestic real-time payments - transaction volumes are multi-directional, making netting and deferred settlement an efficient way to manage liquidity. I assume real-time settlement for real-time payments requires pre-funding, but DNS systems can be pre-funded as well (the UK is moving to this in October), so risk management would be similar for both. 

I saw a presentation recently where YouGuv gave a pessimistic synopsis on contactless card adoption, based on their market research. The presenter failed to reconcile his findings with the abundant evidence of hypergrowth in market adoption (M&S, EAT, Visa stats) and he remained silent when Transport for London followed with a presentation on the growth of contactless bank cards on London buses, which customers love to use. Similarly, the analysis of this poll data appears to be out of touch with facts evident in the market - for example, Strarbucks and Hailo.

er.. consumers and businesses "made 20.8 billion cash payments in 2012, compared with 20.6 billion in 2011." That looks static to me.