The regulatory deadline for the EU’s Instant Payments Regulations (IPR) falls today (9 January),with euro area member states required to comply with two core provisions.
From today the 20 countries of the EU which use the euro as national currency will have to ensure instant payments and equality of charges. A second deadline for the remaining seven EU countries which do not use the euro will come on 9 October.
The regulations come at a time of global adoption of instant payments methods, particularly in markets in Latin America and Asia where demand for alternative payment methods has outpaced that of the more established financial markets of Europe and North America.
Brazil’s Pix is arguably the most successful example of this, having grown to encompass 150 million business and customer accounts as of 2023 after only launching in 2020. This is not to say that Europe has been stagnant, however, far from it.
“Europe led the world in payments,” says Jonathan Arler, Netherlands General Manager at payabl., a B2B payments technology company headquartered in London.
Arler notes that Europe was the first to standardise payments across 32 countries when it created the Single Euro Payments Area (SEPA). SEPA notably includes non-EU members such as the UK, which launched its own instant payments system, the UK Faster Payments Service (FPS), back in 2008.
In 2025, the focus is on account-to-account (A2A) payments and Open Banking. Policymakers and finance stakeholders in various jurisdictions like the EU, UK and US see Open Banking as key to underpinning future financial innovation and economic growth by allowing faster and more seamless payments for both businesses and consumers.
SEPA underpins A2A payments in Europe, but as noted above, other countries – particularly those in Latin America and Asia – have rapidly caught up with and have maybe even surpassed the EU’s progress.
“The potential was transformative, but progress was slow,” Arler remarks about the EU’s early moves with the creation of SEPA. “Over time, the market has been overshadowed by other regions with India’s UPI scheme regarded as one of the most successful globally.”
The adoption of the IPR will likely prove a critical step in seeing the EU catch up with the likes of Brazil’s PIx – which is catching attention within the trade bloc’s own borders – and with other nations like the EU, where some politicians have confidently spoken of a British leadership position in Open Banking.
“The implementation is a major step in catching up with these other regions,” Arler says. “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.”
This is not to say that everything will go smoothly from here on out, however. There are over 5,000 financial institutions across the EU, active across a range of fields including banking, payments processing, credit, card issuing, fintech and paytech, among others.
Not all of these firms will have been adequately prepared for today’s deadline, and may not be for future ones either. Ensuring compliance with the deadlines may be prove costly for some firms in terms of both time and resources, and in the long-term could put these companies at loggerheads with regulation – in short, a lot of companies will have a big job on their hands.
“This new, apparently seamless convenience for consumers and businesses belies the massive effort that’s gone on behind the scenes to make it happen,” says Martin Hargreaves, Chief Product Officer at Quant, a blockchian-focused fintech. “Big banks may already have round-the-clock teams, but for many smaller PSPs, the 24/7 coverage that’s required to ensure uninterrupted service marks a big operational change.
“For risk and compliance teams, the shift to real-time payments is also extremely impactful. Under traditional SEPA payment systems, these teams had several hours to perform due diligence, such as verifying transaction legitimacy, identifying fraud risks, and ensuring compliance with AML regulations. SEPA Instant, however, compresses these critical processes into a few seconds. Firms will have already invested heavily in fraud detection technology to handle the increased pressure, while ensuring that legitimate transactions proceed without friction.”
“Beyond the immediate operational and compliance challenges, SEPA Instant will reshape Europe’s position in the global payments landscape. By matching the instant payment capabilities of the UK, this puts pressure on the UK to innovate its payments infrastructure with new features and services to stay ahead of the pack.”
