With just three months remaining until the European Commission’s Instant Payment Regulation (IPR) begins, banks and payment service providers (PSPs) are under increasing pressure to scale up their technology infrastructure to ensure they can handle an expected surge in transaction volumes as well as comply with the new legislation. Under the new regulations, all banks and PSPs offering regular euro credit transfers must provide 24/7 “real-time” transfers, or SCT Inst, in the Single Euro Payments Area (SEPA).
By January 9, 2025, banks must ensure they can receive instant payments and, by October 9, 2025, be able to send real-time transfers – both within 10 seconds every day of the year. Additionally, it prohibits payment service providers from imposing higher charges for instant payments compared to traditional SEPA credit transfers, while they are also required to introduce IBAN name checks to prevent fraud or errors.
Challenging landscape
While the banking sector is making widespread progress globally regarding instant payments, the Capgemini World Payments Report 2025, published in September 2024, notes a “concerning technological maturity gap between markets.” According to the Capgemini report, European banks and PSPs face a challenging landscape as the January deadline nears. The report highlights that only 13% of banks within the 27-member bloc possess a robust technological infrastructure capable of facilitating instant payments, lagging behind regions such as the Asia Pacific at 30% and the Americas at 26%. “Notably, only 5% of banks achieved high business and technology scores to solidify their position as instant payment adoption leaders,” Capgemini adds.
Meanwhile, RedCompass Labs says the technical implementation will pose a significant challenge for banks that will require them to evaluate and invest in their digital capabilities and collaborate with service providers to meet the two IPR deadlines in 2025. The survey found that 76% of banks in the EU will invest in new technology to comply with the new regulation, with the average investment estimated at between €1 million and €3 million, while 14% plan to invest more than €3 million, and 23% expect to invest less than €250,000.
Rising demand for instant payments
Currently, about 19% of all credit transfers in Europe are facilitated through the instant payments solution, with an estimated 70% of PSPs participating. This indicates that at least 70% of accounts are reachable in Europe. In some countries, such as the Netherlands and Belgium, these reachable accounts represent more than 85% of accounts. According to SBS estimates, the volume of SEPA instant payments is expected to surge when the legislation begins in January 2025. “The 30% of PSPs not engaging in instant payment activities will not significantly contribute to the volume of incoming and outgoing transactions,” says Laurent Hupet, Payment Solution Expert at SBS. “However, in January 2025, the fees on instant payments will not exceed the fees on regular credit transfers; retail and corporate customers will understand that checking the box ‘Instant Payment’ in internet and mobile banking applications will accelerate payments without extra cost: This will lead to the highest increase of volume of 2025” Laurent adds.
The volume of instant payment transactions is also contingent on banks’ strategies, including whether to make instant payments a default option or allow customers to choose it themselves. Assuming a transition from 50% of banks currently offering instant payments with fees to a fee-free structure, the volume could potentially double. From 19% of all credit transfers in instant payments in 2024, it can quickly reach between 30% and 40% in 2025.
By October 9, 2025, all banks must allow instant payment initiation across all channels. However, the 30% of payment service providers not yet offering it are expected to contribute only a few percent to the overall volume in the last three months of 2025. But from October 2025, corporates will start to convert the bulk of credit transfers into instant payments, and we will see progressive growth from 2026. European Central Bank (ECB) statistics show that bulk credit transfers comprised 33% of all credit transfers in Europe in 2023. Total eurozone credit transfers stood at more than 29.7 billion, with about 9.8 billion initiated by file. Our projection assumes that the initiation of bulk instant payments is currently negligible.
Meanwhile, data from the ECB reveals that France is well above the eurozone average in terms of SCT initiation per bulk transfer, at 54%, followed by Belgium (34%), Luxembourg (28%), and the Netherlands (23%). Based on this data, we could expect a higher increase in volume for bulk credit transfers from France. While corporate entities need to update their software for file-based IP initiation, this transition may take one to two years. By the end of 2025, Europe is expected to reach between 35% and 45% of credit transfers in instant payments. The volume will continue to grow in 2026 to reach about 50%, due primarily to the number of corporates that will switch to instant payments.
How SBS can help
SBS offers a SaaS solution that enables banks to address the challenge of instant payments without affecting their core banking or information systems. The solution covers all regulatory requirements, such as sanctions screening, verification of payee, and anti-fraud measures. With our fully modular offer, banks can select the services they require. Our cloud-native architecture is built on microservices, allowing for dynamic scalability and competitive pricing. Security is a top priority at every level of the application and services. By partnering with SBS, banks can access our expertise and knowledge, ensuring successful digital transformations to implement and comply with the EU’s Instant Payments Regulation.
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