On October 26th, 2022, the European Commission published a legislative proposal focused on instant payments in EUR. This proposal will amend the SEPA regulation and the Cross-Border Payments Regulation.
What are Instant Payments?
Instant Payments constitute a much faster alternative to traditional credit transfers, and allow the transfer of money at any time of any day within ten seconds.
Instant Payments, also called Real-Time Payments, have spread quickly in recent years due to increased demand by consumers and businesses for instant money movement. However, the maturity and adoption rates vary by region, with the UK as early adopter since 2008, and many countries such as India, Sweden, Australia and Mexico following. At the end of 2021, only 11% of the credit transfers in the EU were Instant Payments.
Although Instant Payments is a key step toward the future of payments, the true value of Instant Payments is only realized when completed by value-added services also known as “overlays”, such as request to pay, instant cross-border payments and fraud and liquidity management tools.
Financial institutions, Payment Service Providers (PSPs), PayTechs and FinTechs would benefit from providing these “overlays”, to not only increase their bottom lines but also the transactional volumes on the rail itself.
For more information about Instant Payments, have a look at the European Commission’s instant payments factsheet.