Why SEPA Instant is the catalyst for euro payment evolution

Real-time eurozone payments have long been positioned as vital for European consumers and businesses. But despite SEPA Instant launching in 2017, progress has been uneven. Adoption splintered by country and institution, with pricing models and readiness levels creating a payments patchwork rather than a unified system.
By 2023, instant payments accounted for only around 18% of euro credit transfers, with wide variation between markets and institutions.

That changed with the Instant Payments Regulation (IPR), by mandating:

Universal availability of instant payments for euro‑denominated credit transfers
Fee parity between standard SCT and SCT Inst
Execution within ten seconds, 24/7/365
Supporting fraud controls such as Verification of Payee

As a result, instant euro payments are becoming a foundational part of how money moves into, out of and across the eurozone: in real time, at any time.

In doing so, the regulation removes two of the most significant historical barriers to adoption: friction and cost. Once instant payments are always available and no more expensive than traditional transfers, the question is no longer whether customers would use them, but why wouldn’t they?

This shift has profound implications:

For banks, whose infrastructure and cost bases were designed for batch processing
For EMIs and PIs, who must decide whether to deepen reliance on sponsor banks or seek greater control
For businesses and customers, who will increasingly expect payments to move at the same speed as information

We examined these dynamics, from how firms are approaching compliance to the effect on payment methods, in our latest research, ‘SEPA Instant: Build it and they will come.’ Below, I’ll outline the challenges and what will spur SEPA Instant growth.

The challenges presented by real-time payments

Transitioning to instant payments under the IPR timelines poses significant challenges for market participants. While most firms will be compliant, far fewer will be comfortable, for several reasons, including:

Updating legacy technology and infrastructure: Many banks face the challenge of upgrading legacy core banking systems to support 24/7/365 operations and 10-second end-to-end settlement windows, requiring banks to process payments in under 2 seconds. Batch processing models and downtime windows must be re-engineered, for example, by converting to stream processing. Unlike large banks, many EMIs and PIs use cloud-native and API-based tech stacks, which can be an advantage. But they often rely on third-party core banking or ledger systems. If those systems (or vendors) do not yet support SEPA Instant, the EMIs must coordinate upgrades.
Evolving operations to support 24/7×365 payments: Supporting instant payments requires an operational evolution to complement the required technology upgrades. Banks need procedures and staffing for round-the-clock incident monitoring and customer support. Our research revealed that half of the respondents identified these operational challenges as one of their top three concerns, with a third ranking it among the top two challenges.
Implementing Verification of Payee (VoP): From October 2025, PSPs must provide Verification of Payee (VoP), a service that checks the beneficiary’s name against the IBAN before execution and alerts payers of any potential mismatches. Our research revealed that the VoP mandate has caused the most concern among the banks.
Ongoing operational costs: For banks with significant legacy tech stacks, implementing instant payments entails costs, including technology upgrades, scheme fees, and the delivery of new services such as VoP. Many banks historically charged for instant transfers (€0.50–€1 or more), but under IPR, they must price them at, or lower than, the price of a standard transfer. This will squeeze direct fee income and leave PSPs concerned that they might not be able to recoup investment.

The 2030 tipping point

The research forecasts that by 2035, most credit transfers will be instant: every institution surveyed expects at least two-thirds of SEPA Credit volumes to become SEPA Instant. In fact, the tipping point is sooner. Celent forecasts that SEPA Instant volumes will overtake SEPA Credit by 2030, then accelerate further.

SEPA Instant is poised to capture a larger share of the growing payments pie and, by 2035, will become the second-most used non-cash payment type, behind cards, representing 18% of all eurozone payments.

For that to happen, the volume will come from multiple sources:

Migration from SEPA Credit: Once instant payments are universally available and priced the same as SEPA Credit, there’s little incentive for customers to choose slower execution, and institutions have fewer reasons to maintain parallel default options. Most institutions surveyed anticipate that most of the current SEPA Credit volumes will migrate to SEPA Instant over the next decade.
Corporate payments: Even limited adoption among corporates could generate meaningful volume growth. A single migration by a large enterprise, government department or utility provider could move hundreds of thousands, or millions, of payments into SEPA Instant in months. For example, the UK sees a spike in Pay by Bank payments at the end of the tax year because HMRC offers this as a payment option.
E-commerce and account-to-account competition: As open banking, A2A wallets and request‑to‑pay models mature, SEPA Instant becomes a natural settlement layer beneath those experiences. One significant factor to consider is the European Payments Initiative’s (EPI) Wero wallet, which is gaining traction, with key acquisitions such as iDEAL in the Netherlands and a growing number of banks and PSPs joining in the last 18 months. Even modest shifts – for example, a small percentage of card volumes moving to instant, account‑based payments – will have an outsized impact on SEPA Instant volumes.
New volume: An under‑appreciated driver is entirely new payment behaviour. As commerce becomes increasingly driven by APIs, workflows and software agents, payments are increasingly triggered by events rather than initiated by humans. In that context, instant payments are well-suited for agent-initiated payments as they can be triggered automatically; they settle predictably and immediately, and they’re designed to operate continuously without cutoff times.

When real-time is the baseline, what comes next is the opportunity

Payment history suggests that once foundational infrastructure becomes real‑time, always‑on and programmable, it invites experimentation. By the end of this decade, instant euro payments will feel unremarkable. The opportunity lies in what institutions do once that baseline is established.

The structural shift to instant payments in Europe is accelerating a broader transformation towards real-time, intelligent banking. Compliance with IPR is merely the first step. Firms investing in scalable technology, robust fraud management, and innovative customer experiences will be best positioned to thrive in a real-time, intelligent banking environment.

The real winners will be businesses and consumers, as institutions build on instant payments, creating seamless, secure, and intelligent payment experiences where money moves as fast as information and banking truly happens in an instant.