How Instant Payment (SCT Inst) is Quietly Changing the Game for European Corporates
Having launched almost six years ago, the SEPA Instant Credit Transfer is starting to hit its stride with an increased transaction limit helping to encourage usage. For corporates operating in the SEPA zone, the scheme is not without flaws, but initiatives from regulators and banks point to a more functional and secure future.
While the world’s first-ever instant payments scheme, Japan’s Zengin system, was launched some 50 years ago, the topic has only recently begun to capture the imagination of corporates in the past decade. Initiatives such as UK Faster Payments – which should soon see a benefit from the implementation of the country’s New Payments Architecture – Singapore’s FAST, RTP in the US, UPI in India, and Europe’s SEPA Instant Credit Transfer (SCT Inst) were just a few of 64 live real-time payments schemes globally in 2022. SCT Inst is particularly notable because it enables instant payments across multiple national borders within the SEPA zone.
Stéphanie Ekindjian, MD – Global Head of Cash Management Products and Solutions – Societe Generale, comments: “With the SCT Inst, all the characteristics are common among all euro area countries, except for the transaction limits. All transactions have to be processed in less than 10 seconds. The scheme is available 24 hours a day, seven days a week, every day of the year. All scheme participants have to be reachable by any of the banks from the SEPA zone, and the transaction cannot be cancelled once it’s been executed.”
Gaining corporate relevance
The difference in transaction limits is fascinating for corporates due to the enormous payment amounts that treasurers often deal with. When the European Payments Council started the SCT Inst scheme, the limit was just €15,000. That was not too relevant to corporates because, in its infancy, the SCT Inst scheme was driven by the retail industry. While that relatively low threshold was in place when the system began operating in 2017, today it stands at €100,000 in most countries.