Instant Payments, also known as real-time bank transfers, allow payments to be processed around the clock in real time — funds are available to the recipient within seconds. This sets new standards for speed and customer expectations in payments. For banks and payment providers, this means both technical and regulatory challenges, but also opportunities for innovative services.
Instant Payment – A Definition
Instant Payments are defined in the EU as real-time payments where funds must be available in the recipient’s account within a maximum of ten seconds, 24/7. The legal framework is the SEPA Instant Credit Transfer (SCT Inst) scheme, which becomes mandatory under the Instant Payment Regulation (IPR). This regulation requires payment service providers to offer instant payments as standard. The aim is to harmonise European payments, strengthen competitiveness, and provide customers with immediate liquidity.
When Do Instant Payments Become Mandatory?
The Instant Payment Regulation (IPR) will be implemented in two phases. From 9 January 2025, payment service providers must be able to receive incoming instant payments. From 9 October 2025, they must also actively offer outgoing instant payments.
How Do Instant Payments Work?
With instant payments, a transaction is processed in real time, 24 hours a day. Once a payment is initiated, the system checks within seconds whether the sender has sufficient funds and sends the payment instruction via a special clearing system, such as SEPA Instant Clearing, to the recipient’s bank. After successful confirmation, the amount is credited immediately—the entire process usually takes no more than ten seconds.
How Do Banks Benefit?
Banks benefit from instant payments by strengthening their competitiveness and offering customers a modern, fast payment experience. Instant payments also open up new business models, such as request-to-pay or embedded payments. In addition, they help increase customer loyalty, as real-time services have become a standard expectation.
How Do End Customers Benefit?
End customers benefit from instant payments by being able to send and receive money in real time — around the clock, including weekends and public holidays. This increases their financial flexibility, for example when paying bills shortly before the due date or settling private debts immediately. Security is also enhanced, as the recipient can see instantly that the money has arrived.
