TL;DR
The SEPA Instant Payments Regulation mandates that all banks and payment service providers in the European Union be ready to receive instant payments by January 9, 2025, and send them by October 9, 2025, with pricing for instant transfers to be equal to that of regular credit transfers.
SEPA Instant Credit Transfers (SCT Instant) offer 24/7 availability and process payments in seconds, unlike SEPA Credit Transfers (SCT), which are only available during business hours and take up to two business days to process.
The regulation will require significant changes to financial institutions' infrastructure, including robust security measures, the ability to handle high transaction volumes, and compliance with new requirements such as verification of payees and recurring instant payments.
Ivy’s Instant Payments Suite offers businesses seamless access to Europe’s instant payment rails, enabling secure, low-cost payments while ensuring compliance with SEPA Instant regulations.
The Single Euro Payments Area (SEPA) Instant Payments Regulation (Regulation (EU) 2024/886) (IPR) plays a pivotal role in the European Union's efforts to modernize its financial system, enabling real-time electronic payments throughout the region.
Starting January 9, 2025, IPR will mandate that all banks and payment service providers operating in the Single Euro Payments Area must be ready to receive instant payments. Starting October 9 2025, they will also be required to support instant sending capabilities. Furthermore, the price of instant credit transfers cannot be higher than that of ordinary credit transfers, which will reduce transaction costs.
This mandate aims to unlock the potential of instant payments across Europe by enabling pan-European credit transfers with funds made available in 10 seconds or less, around the clock and 365 days of the year.
Implementation will require significant technical and operational changes from financial institutions, including the ability to process high-volume, low-latency payments at all times, and stringent security and anti-fraud measures.
SEPA Instant Payments Implementation Timeline
Receiving Instant Payments
Euro area Member States - 9 January 2025
Non-Euro area Member States - 9 January 2027
Electronic money institutions and payment institutions in euro area and non-euro area Member States - 9 April 2027
Sending Instant Payments
Euro area Member States - 9 October 2025
Non-Euro area Member States - 9 July 2027
Electronic money institutions and payment institutions in euro area Member States - 9 April 2027
Electronic money institutions and payment institutions in non-euro area Member States - 9 July 2027
Outside business hours from payment accounts denominated in national currency in non-euro area Member States - 9 June 2028
Equality of Charges
Euro area Member States - 9 January 2025
Non-euro area Member States - 9 January 2027
Verification of Payee
Euro area Member States - 9 October 2025
Non-euro area Member States - 9 July 2027
Source: European Central Bank
SEPA Instant vs SEPA: What’s the Difference?
SEPA Credit Transfer Payments (SCT) and SEPA Instant Credit Transfer Payments (SCT Instant) differ in several important ways:
Availability: SCT payments are only available during bank business days, while SCT Instant payments are available 24/7, 365 days a year.
Payment Speed: SCT payments can take up to two business days to process, whereas SCT Instant payments are processed instantly, typically within 10 seconds.
Maximum Amount: There is no set limit for either SCT or SCT Instant payments.
Payment Response: Not mandated for SCT payments, while for SCT Instant, a response must be provided within 10 seconds.
Source: European Payments Council
FAQs
This mandate only applies to accounts that quality as payments accounts, which the Court of Justice of the European Union (CJEU) has defined as “the possibility of making payment transactions to a third party from an account or of benefiting from such transactions carried out by a third party is a defining feature of the concept of payment account”.
DG FISMA clarified that PSPs must provide their PSUs with the ability to send and receive instant credit transfers in euro if they already offer non-instant credit transfers. PSPs that do not offer credit transfer services will not be included in the scope.
According to Article 5a(3) of the SEPA Regulation, instant credit transfers can be scheduled for future execution, which supports recurring payments. DG FISMA has stated that PSPs required to offer instant credit transfers must also provide the option for recurring instant credit transfers.
Yes, the IPR requires the payer’s PSP to perform the VoP for every credit transfer. This must happen immediately after the payer provides the necessary information about the payee and before the payer can authorize the transfer. VoP is required regardless of the payment initiation method used. Additionally, anyone legally authorized by the payer to initiate and authorize a payment on their behalf must be treated as the "payer" for the VoP service.
DG FISMA clarified that the IPR does not allow for the automatic "downgrade" of a payment order if it fails (e.g., if it cannot be completed within 10 seconds). All requirements must still be met, and issues related to rejected instant credit transfers, such as those arising from sanctions screening, are addressed in Article 5d of the IPR.
Future-Proof Your Payments with Ivy
Ivy offers unparalleled access to Europe’s Instant payment rails without any of the technical complexity or compliance woes. While others adapt to regulatory changes, Ivy’s Instant Payout
Suite is already optimised for the future of SEPA Instant, building trust, enhancing loyalty, and driving repeat business.
Merchants can unlock the full potential of instant payouts by offering low-cost and secure payments while boosting customer loyalty and ensuring compliance with European payment regulations. And customers get to enjoy the convenience of immediate access to funds for withdrawals, refunds, and transfers, 24/7.
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This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Ivy GmbH or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional. We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
