EU’s instant payments deadline: real-time or bust by January 2025

By Puja Sharma

The Instant Payments Regulation (IPR) is a transformative initiative introduced by the European Union to revolutionise the payments landscape across its member states. This regulation requires all Payment Service Providers (PSPs) to enable the ability to send and receive instant payments, ensuring funds are transferred within seconds, regardless of the time or day. Two critical deadlines have been established: PSPs must prepare to receive instant payments by 9th January 2025, while full compliance, including the ability to send instant payments, must be achieved by the end of 2025.

The regulation’s primary objective is to make the EU a global leader in financial innovation while enhancing financial inclusion. By enabling instant access to funds, the IPR ensures individuals and businesses experience improved liquidity and reliability in financial transactions. Moreover, the initiative promotes a competitive payments ecosystem, encouraging innovation while reducing reliance on slower, traditional payment methods.

To comply with IPR, PSPs must integrate their systems with the SEPA Instant Credit Transfer (SCT Inst) scheme. This allows euro-denominated transactions to process in less than 10 seconds, available 24/7. Compliance also requires PSPs to implement robust fraud detection mechanisms, adhere to stringent anti-money laundering (AML) regulations, and ensure transparent fee structures for users.

Despite its potential benefits, implementing IPR poses challenges for PSPs. Upgrading existing infrastructure to support instant payments and 24/7 operations involves significant financial and technical investment. Ensuring interoperability among diverse payment networks and meeting strict regulatory requirements adds further complexity. However, overcoming these challenges is crucial to unlocking the benefits of instant payments.

For consumers, the regulation means immediate access to funds, whether for emergencies or purchases. Businesses stand to gain from enhanced cash flow management and reduced settlement times, enabling better operational efficiency. For PSPs, IPR creates opportunities to innovate and offer differentiated services, giving them a competitive edge.

The Instant Payments Regulation represents a major milestone in modernising the EU’s financial ecosystem. By focusing on speed, security, and accessibility, it sets the foundation for a future where instant payments become the norm, benefiting all stakeholders while solidifying the EU’s position as a global leader in financial innovation.

Jonathan Arler, Netherlands General Manager at payabl said, “Europe led the world in payments. About 14 years ago, the UK pioneered the first instant payment system. Around 10 years ago, Europe was the first to standardise payments across 32 countries with SEPA. With PSD2/Open Banking, another area Europe pioneered, the A2A payments opportunity emerged that would offer instant, secure and low-cost payments both domestically and across borders. The potential was transformative, but progress was slow.

“Over time, the market has been overshadowed by other regions, with India’s UPI scheme regarded as one of the most successful globally. The implementation is a major step in catching up with these other regions. Cast alongside the Wero wallet, which is gathering momentum across the continent with millions of users, it feels like Europe is “back to the future” of payments.”

However, today’s 9 January deadline is a vital milestone, not the finish line. By this date, all PSPs must be able to receive instant payments. This requirement sets the stage for broader compliance, including the ability to send instant payments and verify payees by October 2025. Verification of payee additionally becomes mandatory across member states on the same day.

With 1% of annual turnover fines for those in serious breach of the rules, it’s clear that policymakers are choosing the stick over the carrot to drive the European payments market forward.”