The 2024 Instant Payments Regulation amends SEPA and PSD2, strengthening euro-zone cross-border payments, while non-SEPA flows remain dependent on correspondent banking networks.

The Instant Payments Regulation (IPR) of March 2024 amends both the SEPA Regulation and PSD2 to mandate near-instant euro transfers, while non-SEPA cross-border payments continue to depend on correspondent banking—a structural split that defines the 2024 EU regulatory framework. Adopted by the European Parliament and Council on 13 March 2024 and entering into force on 8 April 2024, the IPR amends the SEPA Regulation (EU 260/2012), the Cross-Border Payments Regulation, the Settlement Finality Directive, and PSD2 (Source 4). It mandates that euro-zone payment service providers (PSPs) enable receipt of instant payments by 9 January 2025 and sending by 9 October 2025; non-eurozone PSPs face deadlines of 9 January 2027 and 9 July 2027, respectively. Payment institutions and e-money institutions in the eurozone must comply by 9 April 2027 (Source 4). These deadlines mark the most significant regulatory intervention in European payments since the original SEPA Regulation, forcing adoption of real-time processing where voluntary uptake had stalled.

The Instant Payments Regulation (IPR) of 2024

The IPR was adopted by the European Parliament and the Council on 13 March 2024 and entered into force on 8 April 2024 (Source 4). It amends the SEPA Regulation (EU 260/2012), the Cross-Border Payments Regulation, the Settlement Finality Directive, and PSD2 (Source 4). Eurozone PSPs must enable receiving instant payments by 9 January 2025 and sending by 9 October 2025; non-eurozone PSPs have until 9 January 2027 and 9 July 2027 respectively (Source 4). Payment institutions and e-money institutions in the eurozone must comply by 9 April 2027 (Source 4). The regulation mandates 10-second processing, available 24/7 every calendar day, building on the SEPA Instant Credit Transfer schemes established by the European Payments Council (Source 3). The IPR also imposes equality of charges—PSPs cannot charge more for instant transfers than for standard credit transfers—and requires verification of payee services to reduce fraud (Source 4). Implementation is phased: eurozone banks must send instant payments by October 2025, non-eurozone banks by July 2027, and payment/e-money institutions in the eurozone by April 2027 (Source 4). Outside business hours from payment accounts denominated in national currency in non-eurozone Member States must be covered by 9 June 2028 (Source 4). This phased approach reflects the infrastructure upgrades required across different market segments.

SEPA and PSD2 as Pillars of Euro-Zone Payment Integration

SEPA enables fast, low-cost euro payments within the EU and partner countries, treated like domestic transfers (Source 5). The Cross-Border Payments Regulation (EC 924/2009), amended in 2021 and 2024, ensures cross-border euro payments in the EU carry the same charges as domestic payments (Source 5). PSD2 ignited open banking momentum, enabling account-to-account payments and third-party access (Source 6). The IPR builds on SEPA Instant Credit Transfer schemes to mandate 10-second processing 24/7 (Source 3, 4). Together, these frameworks create a regulatory architecture where euro-denominated payments within SEPA—covering the EU, EEA, and participating non-EU countries such as the UK—operate at domestic prices and speeds. Before the IPR, adoption of instant payments lagged: in 2023, only about one in ten euro credit transfers in the EU were processed as instant payments (Source 7).

%Source: Orionmano Industries

The regulatory framework also extends to non-euro EU member states, which must comply with the same charge-equality rules for euro-denominated cross-border payments, though domestic currency transactions within those states are not covered. The UK, while outside the EU, participates in SEPA as a non-EU country, allowing euro payments via SEPA to avoid SWIFT fees (Source 5). This demonstrates the geographic reach and cost advantages of SEPA infrastructure.

Non-SEPA Cross-Border Payments: Reliance on Correspondent Banking

For payments outside the euro zone or in non-euro currencies, the landscape is fundamentally different. SWIFT is used for international payments in any currency; transfers are slower and involve multiple intermediary banks (Source 5). The one-leg out instant credit transfer (OCT Inst) scheme facilitates instant transfers where one participant is outside SEPA, but adoption is limited (Source 7). The UK, though outside the EU, participates in SEPA as a non-EU country, allowing euro payments via SEPA to avoid SWIFT fees (Source 5). In 2023, only about 1 in 10 euro credit transfers in the EU were processed as instant payments, demonstrating the dominance of non-instant correspondent banking for non-SEPA transactions (Source 7). Correspondent banking chains introduce multiple layers of cost: each intermediary bank may charge fees, foreign exchange spreads are opaque, and settlement times can range from one to five business days. The OCT Inst scheme, designed to extend instant processing to corridors where one leg is outside SEPA, has yet to achieve the critical mass needed to displace traditional correspondent networks. Until OCT Inst achieves broader adoption, non-SEPA corridors will continue to rely on correspondent banking, maintaining the structural split between integrated euro-zone payments and slower, costlier international transfers.

The IPR does not directly address this gap: it applies only to euro-denominated credit transfers within the EU. Cross-border payments in non-euro currencies or involving non-SEPA jurisdictions remain outside the scope of the mandate. As IPR implementation phases unfold through 2028, instant euro transfers are expected to become the norm within SEPA, but non-SEPA corridors will continue to depend on correspondent banking until the OCT Inst scheme achieves broader adoption. The European Payments Council's OCT Inst scheme offers a potential bridge, but its limited adoption means correspondent banking will remain the default for non-euro and non-SEPA transactions for the foreseeable future.