Money moves fast. Or at least, it should.
Until recently, a “fast” transfer in Europe still meant waiting a business day (or two) for funds to clear, and weekends were off-limits. But that’s changing.
The EU has made instant payments the new standard. Thanks to the Instant Payments Regulation (IPR), every bank and payment provider in the euro area will soon have to offer 24/7, real-time euro transfers at the same cost as regular ones.
For businesses, this isn’t just another update to banking rules; it’s a significant step toward faster settlements, better cash flow visibility, and smoother customer experiences.
Let’s unpack what this shift means and how your business can turn it into an advantage.
What’s behind “instant” payments in the EU
At the core lies the SEPA Instant Credit Transfer (SCT Inst) scheme, or simply SEPA Instant.
It’s part of the Single Euro Payments Area (SEPA), which unifies how euro payments move across 36 European countries. Until now, a standard SEPA transfer could take up to one working day. SEPA Instant cuts that to under 10 seconds, 24 hours a day, every day of the year, including weekends and holidays.
Here’s how it works: when a payer initiates a SEPA Instant payment, the funds move directly between their bank and the recipient’s bank in real time. The payee’s account is credited almost immediately, and both sides receive confirmation within seconds.
Behind the scenes, two systems make this possible:
- TIPS (TARGET Instant Payment Settlement) is operated by the European Central Bank and settles instant payments in central bank money, ensuring maximum reliability and security. It connects banks across Europe, allowing transfers to move between countries as quickly as domestic ones.
- RT1 (Real-Time 1) – a private-sector network, managed by EBA Clearing, that processes instant payments between participating European banks. It’s fully interoperable with TIPS, ensuring that a payment made through one system can be received by the other.
In short: SEPA Instant is the rulebook, and TIPS and RT1 are the rails that make it work. Together, they’re making “instant” the new normal for how money moves across Europe.
What it means for businesses
The regulation pushes banks and PSPs to adopt instant transfers, but it’s businesses that will feel the real impact.
1. Faster payments mean healthier cash flow
Instant settlement means your funds arrive in seconds, not days. If a customer pays on a Friday night, you see the money on Friday night. That unlocks better liquidity, quicker reinvestment, and stronger financial control.
2. Customers get instant reassurance
When people pay online for a product, subscription, or top-up, they want to see that instant “Payment successful” message. Real-time transfers deliver just that, improving trust, satisfaction, and checkout completion rates.
3. Lower costs, fewer declines
Instant payments move money directly between bank accounts, with no card schemes, acquirers, or intermediaries involved. This means fewer declined transactions, lower fees, and less friction for both merchants and customers.
4. Instant payouts
Whether you pay freelancers, affiliates, or marketplace sellers, instant payouts turn waiting time into wow moments. Funds arrive within seconds, creating a smoother, more transparent experience and building trust.
5. Request-to-Pay brings new convenience
Paired with instant transfers, SEPA Request-to-Pay (SRTP) lets you send digital payment requests that customers can approve directly from their bank app. It simplifies invoicing, shortens collection cycles, and reduces manual chasing.
Key points of Instant Payment Regulation
So, what exactly does the Instant Payments Regulation (EU) 2024/886 change?
- Every bank in the euro area must support instant payments. If a bank offers standard SEPA credit transfers, it must also be able to send and receive instant ones. The first deadlines arrive in 2025 for euro-area banks and extend into 2027 for non-euro SEPA countries.
- Instant payments must cost the same as regular ones. Banks and PSPs can no longer charge extra for instant transfers. For merchants, that means adopting faster payments doesn’t come with a higher price tag.
- Verification of Payee becomes mandatory. Every payer should be able to confirm that the payee’s name and IBAN match before sending a payment. It’s a simple yet powerful tool against fraud and misdirected transfers.
- Sanctions screening gets faster and smarter. Instead of checking every single transaction in real time, banks now perform daily screenings of their users, keeping instant payments safe and compliant without adding friction.
- Transparency and accessibility take centre stage.
Providers must clearly inform customers about the availability of instant transfers, pricing, and error handling – ensuring trust and a consistent experience across Europe.
In essence, the EU wants instant payments to be as universal and effortless as card payments are today – only faster, cheaper, and more secure.
How businesses can make the most of it
The rise of instant payments isn’t just about compliance. It’s about opportunity. Businesses that act early can turn speed into a competitive edge.
You can easily achieve it by working with Payop – a licensed payment service provider that bridges traditional banking rails with modern alternative payment solutions.
- Accept Pay by Bank payments at checkout
Payop offers its own Pay by Bank solution powered by open banking – real-time, secure, and available across 12 European countries. Customers pay directly from their accounts, and you get immediate confirmation without worrying about card rejections or chargebacks.
- Send instant payouts anytime, any day
Payop’s infrastructure supports real-time processing, allowing platforms, gaming operators, and marketplaces to fund users without delays. It’s a simple way to boost loyalty and user trust.
- Scale across Europe with one integration
Payop connects you to a wide selection of local payment methods under one platform. So whether your customers are in Spain, Germany, or Italy, and whether they prefer bank transfers, e-wallets or crypto, you can offer the same seamless experience without juggling multiple providers.
By embracing instant payments, you’re giving your customers what they already expect: speed, reliability, and control.
The above information does not constitute any form of advice or recommendation by London Loves Business and is not intended to be relied upon by users in making (or refraining from making) any finance decisions. Appropriate independent advice should be obtained before making any such decision. London Loves Business bears no responsibility for any gains or losses.
