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How New Regulations Will Transform European Payments

November 20, 2023


The European financial services sector is on the cusp of a transformative era. On 7 November 2023, the EU Council and Parliament reached a pivotal agreement on Instant Payment Regulations, heralding a new chapter in the realm of European payments set to unfold in early 2024. This article peels back the layers of this significant development, exploring its far-reaching implications for individuals and businesses across Europe.

The New Era of Instant Payments in Europe

The provisional agreement marks a momentous shift in European finance. Integrating real-time interbank clearing systems with open banking APIs, this legislative move is slated to be the most significant disruption to financial services in decades. The formula is straightforward yet revolutionary: Instant Rails + Easier Access = A revamped, cost-effective payment network.

SEPA Instant Credit Transfers: A Game-Changer

At the heart of this transformation lies SEPA Instant Credit Transfers (SCT Inst). With the potential to span 36 European countries and currently accessible through Payment Service Providers (PSPs) in 29, SCT Inst facilitates instant euro transactions, enabling funds to be transferred within seconds at any time, transcending borders within the EU.

Features of SCT Inst

SEPA Instant Credit Transfers (SCT Inst) offer a wide-reaching impact with the potential to extend across 36 European countries, signifying a significant expansion in financial connectivity. This system is notable for its remarkable speed, as it enables transfers to be completed within seconds, irrespective of the time or day of the year. Moreover, SCT Inst excels in cross-border efficiency, facilitating smooth financial transactions not only within individual countries but also across various member states of the European Union, thereby enhancing financial integration within the region.

Overcoming Challenges: Cost and Coverage

SCT Inst, despite its potential, has been grappling with issues of cost and coverage. Currently, only 62% of European PSPs offer instant payments, and just 15% of SEPA credit transfers utilize instant payment rails. High fees for instant transfers have been a significant deterrent, impeding broader adoption.

The Cost Barrier

One of the primary challenges faced in the adoption of SCT Inst has been the cost barrier. Typically, customers encounter fees around €1.50 for instant transfers. This pricing structure has been a significant factor contributing to the slow uptake of instant payments across Europe. The additional cost, even if relatively small, can be a deterrent for frequent use, particularly for individual consumers and small businesses operating on tighter budgets.

Coverage Concerns

Regarding the coverage of SCT Inst, there has been limited adoption among banks, with many not adopting SCT Inst as their default rail for transactions. This hesitancy in fully embracing instant payments has restricted their widespread use. However, the future looks promising as the new legislation aims to make instant payments universally accessible. This move is expected to dramatically alter the financial landscape by 2025, potentially leading to a broader and more inclusive adoption of instant payment systems.

Consumer Benefits

From a consumer perspective, the introduction of SCT Inst brings numerous benefits. One of the most significant advantages is the reduced cost of transactions. The legislation mandates lower fees for instant payments, potentially making them comparable to or even cheaper than traditional transaction methods. Additionally, enhanced accessibility is a key benefit, as universal access to instant payment options opens up a world of financial opportunities for consumers, providing them with more flexibility and efficiency in their financial transactions.

Merchant Advantages

For merchants, the advantages of adopting SCT Inst are twofold. Firstly, there is a clear benefit in terms of cost efficiency, as the reduced payment processing expenses can lead to significant savings for businesses. This is particularly beneficial for small and medium-sized enterprises (SMEs) that operate with narrower profit margins. Secondly, the operational benefits of quicker settlement times cannot be overstated. Faster settlements lead to improved liquidity and better cash flow management, which are crucial aspects of successful business operations, contributing to overall financial stability and growth potential.

The Future of Open Banking-Enabled Payments

This legislative development is a substantial enabler for open banking-enabled payments, setting them on course to become a mainstream payment method across Europe. Todd Clyde, CEO of, equates the transition from traditional to instant transfers to the evolution from mail to email, underscoring the magnitude of this shift. This initiative is aimed at fostering not only competition but also at enhancing the overall payment experience for consumers and businesses.

Get Ready for a Financial Revolution

With this imminent financial revolution, staying informed and adaptable is crucial for businesses and individuals alike. For insights into adapting to these changes or for implementing Pay By Bank as a core payment method, stands ready to assist.


The introduction of the Instant Payment Regulations in Europe is a pivotal moment, marking a transition towards a future where payments are not just faster but also more accessible and affordable. This shift is set to redefine the nature of financial transactions, and staying ahead of the curve will be key to harnessing these changes for growth and innovation.

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