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What is Instant Payment?

Instant Payment is a new European means of payment, available to individuals and businesses from 2018 onwards, which enables instant bank transfers (approximately 10 seconds).

Instant Payment is a project that has involved many European institutions since 2015, including the European Retail Payment Board (ERPB), the European Payment Council (EPC) and the European Banking Authority (EBA), to develop a pan-European instant payment solution for 2017/18.

Europe wants to support innovation in payments and offer a new real-time payment solution to users. The objective is to create a competitive and integrated market that responds to the evolution of our society as illustrated by new consumer behaviours.

Instant payment, instant transfers between bank accounts, has existed for several years in certain countries such as the United Kingdom with the Faster Payments Service (FPS). Launched in 2008, exchanges represented 1.5 billion transactions in 2016 for a total of 1,100 billion pounds. This time, the service is regional and will be rolled out in more than 30 European countries in 2018 and develop real-time cross-border payments.

What is the difference between a traditional credit transfer (SEPA Credit Transfer) and SCT Inst (SEPA Instant Credit Transfer)?

Instant payment responds to a demand and provides solutions to facilitate different uses: money transfer between individuals or companies, money transfer from a consumer to a merchant or a public service (and vice versa).

The new system also makes it possible to carry out interbank settlement much faster than current solutions. Today, when SEPA credit transfers are made, they are processed by the bank in batches within 24 hours. Clearing and settlement take place on D+1.

Tomorrow, instantaneous credit transfers will be processed at the real-time transaction level. As soon as a payment service provider identifies that the SEPA transaction is an instant payment, interbank clearing will be immediate between the payer (debited account) and the payee (credited account).

This new means of payment, available in all 34 countries of the SEPA area, will not be mandatory and will therefore not immediately replace the current SCT credit transfer. Instant Sepa Credit Transfer, which operates on a dedicated scheme, will be open to all authorised and licensed PSPs in the SEPA zone countries.

What are the characteristics of Instant Payment?

Payment by Instant Credit Transfer (SCT Inst) is made in near real time, the money is credited to the beneficiary’s account within 10 seconds. A person can send and receive an Instant Transfer 24 hours a day, any day. The maximum amount of the SEPA Instant Transfer is EUR 15,000, and like the current transfer, it is irrevocable.

  • Payment in euros
  • Maximum amount of the transaction 15,000 €.
  • Run time +/- 10 seconds
  • Immediate credit
  • Irrevocable
  • Availability 24/7/365
  • Independent of interbank clearing and settlement mechanisms

In 2015, €27 trillion was exchanged in cashless transactions and SEPA credit transfers accounted for more than 50% of exchanges in value terms, i.e. almost €14 trillion.

Instant payment is therefore a major challenge for European bodies that want to make trade flows more fluid and support the growth of transactions between Member States. This new means of payment, which is an alternative to cards and cheques, is a technological revolution that is helping to improve payment systems, costs and the user experience.

It also represents an opportunity for merchants by reducing transaction risks (payment guarantee, reduction of management costs, cash savings, etc.) and for payment service providers an opportunity to develop new products and services for consumers and businesses.