European banks reveal readiness to meet instant payments deadline

Around one-third of European banks are not confident about meeting the 2025 instant payment deadline, while the majority believe the timelines imposed by the new regulation are “unrealistic”.

The findings are based on research conducted among 200 senior payment professionals at European banks by RedCompass Labs.

When asked about their readiness in terms of their current instant payment capabilities, 80% of respondents said SEPA Instant Credit Transfers payment method is available to at least one client segment in their bank.

Those banks not currently offering SEPA Instant Credit Transfers were asked if they are confident they will be able to receive instant payments by the end of 2024, with 68% saying there were either “somewhat” or “very” confident.

However, 33% admitted they are “unsure” or not confident about meeting the deadline, with respondents in Germany (63%) and France (67%) demonstrating the lowest levels of confidence.

The same group were then asked if they think the timelines imposed by the European Parliament are realistic, to which 58% responded that they are not.

The majority of banks, at 76%, intend to invest in technology to meet the new EU-wide instant payments regulations, rising to 98% of banks in Spain, but falling to 56% among German banks.

On average, European banks expect to invest between €1 million and €3 million in technology.

Despite the implementation costs, the research revealed that 77% of banks believe the benefits of SEPA Instant outweigh the levels of investment required, with 55% intending to offer instant payments as the default payment option for their clients in the future.

Tom Hewson, partner and chief executive officer of RedCompass Labs, wrote in his introduction to the report ‘So, you think you’re ready for SEPA Instant?’ that Europe is “taking a leap forward with new legislation that will make around-the-clock instant payments the new normal”.

“This is an exciting development, but the deadlines are tight. Banks, already extremely stretched delivering the migration to ISO 20022, must be able to send and receive instant payments by the end of 2025. That’s a big ask,” he said.

Hewson added: “Rolling out an instant payment service across all payment channels in time will be challenging, but the benefits and opportunities of this regulation will change the world.”

Payment service providers in the Euro area have nine months to be ready to receive instant credit transfers in euros and 18 months to send them.