From Vision to Obligation: Banks and PSPs on the Road to Instant Payment

A look back: How it all began in Europe

Although initial projects to accelerate bank transfers emerged worldwide before 2010, especially in the UK, efforts in the Eurozone initially focused on harmonizing cross-border payments through the SEPA initiative. The focus on speed only gained momentum later due to increasing global competition, the rise of mobile payment solutions, and growing customer expectations.

A pivotal moment came in 2014 with the creation of the Euro Retail Payments Board (ERPB), a coordination body led by the European Central Bank (ECB). The ERPB identified instant payments as a strategic priority for the European Single Market. The goal: create a unified framework to avoid national fragmentation and encourage innovation. The mission was clear: Europe needed a pan-European instant payment scheme as reliable, secure, and interoperable as traditional SEPA transfers - only faster.

Milestones on the road to SEPA Instant Payments

An intensive phase of technical and regulatory preparatory work followed the strategic objective. The most essential stages mark a clear line of development, from a voluntary initiative to a binding infrastructure.

2016

Launch of the SEPA Instant Credit Transfer (SCT Inst) Rulebook

The European Payments Council (EPC) introduced the SCT Inst scheme at the end of 2016, setting key standards:

• Maximum execution time of 10 seconds
• Initial transaction limit of €15,000 (later raised to €100,000)
• Availability 365 days a year

Participation was voluntary for banks in all SEPA countries.

2017

SCT Inst and RT1 go live

In November 2017, SCT Inst became operational. At the same time, EBA Clearing launched RT1, a private yet accessible infrastructure for instant payments across Europe. 17 banks from 18 countries joined from day one, sending a strong signal that the market was ready.

2018

TIPS launched by the Eurosystem

To provide a public, centralized solution, the ECB launched TARGET Instant Payment Settlement (TIPS) in November 2018. TIPS allowed real-time settlement in central bank money, ensuring interoperability and availability.

2020–2021

Stagnation leads to political intervention

Despite technical readiness, adoption remained low. In early 2020, fewer than 10% of SEPA credit transfers in euros were instant. The ECB responded with a “Reachability Mandate”: by the end of 2021, all PSPs using TARGET2 had to be reachable via TIPS, directly or through a service provider. The transaction limit was also increased to €100,000. Yet, usage remained in the single-digit or low double-digit percentage range.

2022

The European Commission steps in

In October 2022, the EU Commission proposed legislation to make SCT Inst mandatory, shifting from a voluntary to a regulated model, with clear deadlines, enforcement mechanisms, and consumer protections.

Regulation 2024/886: Content, Requirements, and Timeline

The new EU Regulation 2024/886 came into force on April 8, 2024. It amends the 2012 SEPA regulation, mandating instant payments in euros for all PSPs offering regular euro credit transfers within SEPA.

The regulation has four core goals:

1. Availability: All banks and PSPs must support SCT Inst payments 24/7.
2. Price parity: instant payments must not be more expensive than regular SEPA transfers.
3. IBAN-name verification: To prevent fraud, a mandatory name-IBAN check is introduced. Customers are warned if the entered name doesn’t match the account number – similar to existing systems in the Netherlands or UK.
4. Sanctions screening:
   Instead of checking each transaction against sanctions lists, PSPs must perform daily customer data checks, balancing speed and regulatory compliance.

Key Deadlines

Additional grace periods apply for:

• IBAN verification: 12 months from enactment
• Sanctions screening: 9 months from enactment

Securing Instant Payments: Why Fraud Prevention Must Evolve

With the speed of instant payments comes increased risk. Unlike traditional transfers, which can sometimes be reversed, SCT Inst payments are final within seconds.

For PSPs, this means fraud detection must happen in real time without slowing down transactions.

Modern solutions like RiskShield offer:

• Millisecond-level transaction analysis
• Pattern detection for social engineering, account takeovers, and “Authorized Push Payment” fraud
• A hybrid of rule-based and machine learning techniques with network logic

This allows high-risk payments to be blocked before damage occurs - essential for secure and compliant instant payments.

Conclusion: Real-time is no longer optional - it’s mandatory

The evolution of instant payments in Europe shows how a market-driven concept can become a legally binding standard. What started as a voluntary initiative is now an EU regulation.

For PSPs, real-time payments are no longer a choice, they’re a legal requirement. But beyond compliance, they also offer a springboard for better services, enhanced customer experience, and innovation.

Success requires thinking about security, scalability, and compliance from the outset.

Want to learn more about securing Instant Payments?
Discover how RiskShield protects real-time transactions.