Swift reveals expected impact of EU Instant Payments regulation on SMEs

The majority of SMEs in Europe expect the EU’s Instant Payments Regulation to have a positive impact on their business, citing improved cashflow among the benefits, according to new research.

Financial messaging service provider Swift conducted the research among more than 2,000 decision makers at SMEs in Spain, France, Germany and Italy, who already transact cross-border within the EU.

The study revealed that nearly nine in 10 SMEs expect to be impacted by the regulation, which came into effect in April this year.

Among respondents, 44% said the regulation will save their business money, while 27% think it will help improve their cashflow and one in five expect to be more competitive.

Swift quoted one respondent as saying that it will allow them to “gain time and be more efficient”, because their suppliers often wait to receive funds before shipping goods.

Another respondent told Swift the regulation will be “a great incentive to work with suppliers from abroad” as “it will make it much easier to manage payments and reduce expenses”.

In February, the European Parliament voted to adopt EU-wide instant payments, which will ensure transferred funds arrive immediately into the bank accounts of retail customers and businesses across the EU.

The survey found that 83% identified upfront beneficiary checks as important to them.

The EU’s Instant Payments Regulation mandates Verification of Payee (VoP) for cross-border payments within the Single European Payment Area (SEPA) by October 2025.

Swift said that while many countries use VoP at “a domestic level”, interoperability between these schemes “is critical to its success on an international scale”.

Marianne Demarchi, chief executive, EMEA, at Swift, said: “The European regulation has the potential to be a landmark development for the cross-border payments industry, but financial institutions are under pressure to comply with the Verification of Payee element by the October 2025 deadline.”