Instant Payments: Europe’s Next Big Financial Turning Point
Published: October 20, 2025
A recent online briefing from Bank of America’s Chris Jameson, Head of Product Management, GPS EMEA, and David Voss, Head of Payments and Receivables, GPS EMEA, provided an update on the recent SEPA Instant requirements, its benefits and opportunities .
Earlier this month, the European payments landscape reached a new milestone: the rollout of mandatory SEPA Instant Credit Transfers (SCT Inst) and the introduction of verification of payee (VoP). These changes, though technical in nature, promise to fundamentally reshape how money moves across the continent.
For banks, corporates, and consumers alike, Voss is not anticipating “an overnight avalanche”. Instead, he sees this moment as “a very important milestone for the industry” and indeed an “inflection point for instant payments to grow in terms of their usage, their availability, and the possible use cases”.
Why SCT Inst matters
The central requirement of SCT Inst is simple but, it is hoped, game-changing: funds must reach the beneficiary’s account within 10 seconds. Crucially, the regulation ensures pricing parity. Instant payments must cost the same as traditional SEPA credit transfers, eliminating disincentives and paving the way for widespread adoption. “The intention is clear: no hidden disadvantages,” explained Voss. “That will maximise the number of clients willing to embrace the benefits of instant.”
But the range of advantages extends beyond mere velocity. From 24/7 settlement to improved liquidity visibility, instant payments promise a new level of flexibility – particularly for treasurers who must manage inflows and outflows in real-time.
“There’s obviously a working capital benefit if companies are collecting faster,” commented Jameson. “But the data richness that comes with this payment infrastructure will also enable a smoother, easier, more automated reconciliation, which again, is an opportunity to remove costs for those able to maximise the benefit there.” He added: “We may even see pricing evolve for SCT Inst; that could present cost-benefit opportunities for clients.”
In VoP we trust
Alongside SCT Inst, the EU is rolling out VoP, a service enabling payers to check the beneficiary’s name before executing a transfer. It’s a simple but powerful safeguard, designed to combat fraud and build confidence in the system.
The UK’s experience is telling, said Jameson. Here, the notion of ‘confirmation of payee’ has changed consumer behaviour; many now hesitate or refuse to transfer money unless their banking app shows the reassuring ‘two green ticks’. Similar patterns are expected in Europe. For corporates, VoP adds a layer of trust to high-value transactions, reducing the risk of misdirected payments and making instant transfers more attractive.
Corporate treasury call to action
For corporate treasurers, instant payments may represent a call to rethink liquidity management.
This means new approaches to pooling, forecasting, and real-time cash monitoring. “Speed creates opportunity,” noted Voss. However, the corporate treasury payment transformation is unlikely to be seamless. For Jameson, it presents “a material shift from a process perspective and also from a technology perspective”.
Sharpening the competitive edge
Instant payments can be a source of competitive advantage. “Corporates can differentiate themselves by using the new process to improve supplier relationships, accelerate refunds, or offer employees faster settlements,” said Jameson.
For small businesses and individuals, cash flow is often critical. Corporates able to disburse funds instantly – whether to gig-economy workers, insurance claimants, or suppliers – may stand out against slower-moving rivals.
The applications are broad, noted Voss. Beyond e-commerce, where real-time refunds and payouts are increasingly expected, sectors such as insurance, logistics, and even those issuing public disbursements are exploring instant payments. He offered the use case of an insurer covering a hospital bill abroad within seconds, or a government sending emergency relief instantly to citizens’ accounts.
Lessons from afar
Europe isn’t moving in isolation. Globally, real-time payment schemes have already transformed economies, noted Jameson. Brazil’s Pix system and India’s Unified Payments Interface (UPI) process billions of instant transfers annually, while US initiatives such as FedNow and RTP are gaining traction.
The common thread in successful rollouts is strong regulatory support. By ensuring ubiquity, safety, and fair pricing, regulators in these markets have created the conditions for mass adoption. Europe, too, is following that playbook.
But speed comes with risk. In Brazil, the rapid rise of Pix was accompanied by a surge in real-time fraud. Jameson noted: “Real-time payments means the money goes out the door in real-time, and therefore, if fraud is at play, that equates to the threat of real-time fraud.” The EU naturally hopes its VoP tool will mitigate similar risks – it is seen as the chief form of protection – but vigilance will remain essential for both banks and corporates.
Of course, domestic instant payments are only the beginning. The real prize lies in cross-border real-time transfers.
Some promising collaborations, bringing cross-border payment schemes together, are already emerging, such as the India–Singapore connection. In Europe, initiatives such as the One-Leg Out (OLO) Instant Credit Transfer (OCT Inst) scheme, and efforts from Swift, aim to bridge gaps.
From novelty to norm
The G20’s 2027 goal of “faster, cheaper, more resilient” cross-border payments (described in its Roadmap for Enhancing Cross-border Payments), underscores the urgency of transition, said Jameson. Achieving it will require co-ordination, standardisation, and perhaps most importantly, trust.
For corporates, Voss explained that the transition to instant payments will therefore be incremental. Many firms will dip their toes in the water with niche use cases – such as e-commerce refunds or payroll for gig workers – before shifting core payment flows. Others will stick to ‘on-time’ rather than real-time, prioritising payment efficiency over immediacy.
Still, the direction is clear: instant will move from novelty to norm. For Voss and Jameson, the shift will depend on clients’ needs. “We believe the key is understanding our customers’ needs,” said Voss. “For corporates, the move to instant payments will likely be gradual and time required will depend on their state of readiness.” Jameson commented: “Not every treasury office will flip the switch overnight. But the journey has begun, and those who adapt early may find themselves with a powerful edge.”