Article by Anshika Arya, Editor, IPC.
The European Union has ushered in a significant shift in payments with the introduction of the Instant Payments Regulation (IPR). This new legislation is set to transform how consumers and payment service providers (PSPs) operate, offering greater convenience, fostering innovation, and reducing costs.
Quick Overview
- The Instant Payments Regulation (IPR) is a new EU law requiring all PSPs to enable euro payments within seconds, available 24/7 across the EU.
- The IPR promises numerous benefits, including faster transactions, lower fees, increased competition, and improved customer satisfaction.
- The regulation will take effect on April 8, 2024, and will be implemented in two phases: nine months to comply with receiving instant payments and 18 months for sending them.
What is Instant Payments Regulation?
The IPR is designed to address disparities in instant payment access across the EU, mandating that all PSPs must facilitate instant euro payments 24/7, 365 days a year, both domestically and across EU member states. It also considers the needs of non-euro area entities.
In addition to standardizing rules and ensuring interoperability and security among different payment systems, the IPR strengthens consumer protections, including real-time notifications of payment success or failure and enhanced refund rights for unauthorized or incorrect payments.
Benefits for PSPs and Consumers
The IPR offers several key advantages:
- Increased Convenience and Speed: Users can send and receive euro payments instantly, anytime, anywhere, using their existing payment methods.
- Lower Fees: PSPs will no longer be allowed to charge premiums for instant payments over standard SEPA credit transfers, likely reducing costs for users.
- Enhanced Competition and Innovation: The IPR levels the playing field, encouraging new entrants, including fintechs, to offer instant payment services.
- Reduced Costs for PSPs: Changes to the Settlement Finality Directive (SFD) accompanying the IPR will allow electronic money institutions (EMIs) and payment institutions (PIs) to access central bank payment systems directly, reducing reliance on intermediaries and fostering competition.
- Improved Customer Satisfaction: With features like request-to-pay, confirmation of payee, and instant refunds, PSPs can offer enhanced services that boost customer loyalty.
Implementation Timeline
The IPR was published in the EU Official Journal on March 19, 2024, and will take effect on April 8, 2024. PSPs will have until January 9, 2025, to comply with the receiving instant payments requirement. By October 9, 2025, all bank-PSPs in the eurozone must offer instant payment sending capabilities. Non-eurozone PSPs have until January 9, 2027, for receiving and July 9, 2027, for sending instant payments.
Non-bank PSPs, such as EMIs and PIs, must also meet the same deadlines by April 9, 2027.
Tink’s Role in Shaping the IPR
Tink, in collaboration with Visa, played a pivotal role in shaping the final text of the IPR. Our contributions ensured several key amendments were adopted, including:
- No New Fees for Standard Payments: PSPs are prohibited from introducing new fees for regular payments to compensate for the removal of premium charges for instant payments.
- Simplified Confirmation of Payee: PSPs are exempt from conducting IBAN-name checks when payee details are provided by a Payment Initiation Service Provider (PISP), streamlining the process.
- Real-time Payment Feedback: PSPs must inform the payer and PISP of the payment order’s success or failure in real-time, enhancing transparency and trust in the service.
These amendments are designed to promote a more efficient, competitive, and innovative payments environment in the EU, maximizing the potential of instant payments more than six years after SEPA Instant services were first introduced.
Dive into the heart of instant payments evolution with the Balkans Instant Payments Round Table. As a dynamic regional forum, we're gathering the industry's brightest minds, financial experts, and technology pioneers to drive the transformation of payments in the Balkans region. Join this intimate and engaging discussion that delves into the intricacies of instant payments. This round table brings together key stakeholders from across southeastern Europe including Albania, Croatia, Greece, Serbia, Slovenia and more to explore challenges, share best practices, and foster collaboration that propels the adoption of instant payment solutions.
Unveil the untapped potential of instant payments in the Baltics. From financial institutions to cutting-edge fintech disruptors, this round table convenes a diverse array of stakeholders to uncover opportunities, streamline processes, and enhance the financial fabric of the Baltic region. Join us for an illuminating dialogue that transcends borders and explores the nuances of instant payments. The Baltics Instant Payments Members Round Table Meeting is your platform to share insights, exchange ideas, and collaborate with fellow industry experts from Northern Europe including Estonia, Latvia, Lithuania in a vibrant atmosphere conducive to innovation and growth. 
Step into the forefront of the instant payments revolution with the Central Europe Instant Payments Round Table. As a premier regional platform, we're assembling the sector's leading thinkers, eminent financial professionals, and innovative tech trailblazers to catalyze the metamorphosis of payments in Central Europe. Engage in a deep and insightful conversation that navigates the complexities of instant payments. This round table amalgamates pivotal stakeholders from across Central Europe, encompassing countries like Poland, Czech Republic, Slovakia, Hungary, and more, aiming to dissect challenges, disseminate best practices, and cultivate a synergy that accelerates the embrace of immediate payment methods.
Embark on a journey into the epicenter of instant payments progression with the Benelux Instant Payments Round Table. As a distinguished regional convocation, we are rallying the industry’s foremost intellects, esteemed financial leaders, and avant-garde tech innovators to spearhead the renaissance of payments within the Benelux domain. Immerse yourself in a profound and constructive discourse that ventures deep into the subtleties of instantaneous transactions. This round table melds pivotal figures from Belgium, the Netherlands, and Luxembourg, endeavoring to untangle challenges, promulgate top-tier methodologies, and nurture alliances that advance the adoption of real-time payment frameworks.
Delve into the nexus of instant payments transformation with the Iberia Instant Payments Round Table. As a distinguished regional assembly, we're mobilizing the sector's top strategists, revered financial authorities, and trailblazing tech visionaries to pioneer the next era of payments in the Iberian peninsula. Engage in enriching dialogues that dissect the fine details of immediate transactions. This round table assembles vital influencers from Spain and Portugal, striving to address challenges, propagate effective strategies, and foster partnerships that bolster the swift adoption of instant payment mechanisms.
Embark on a transformative odyssey with the Nordics Instant Payments Round Table. As a paramount regional confluence, we're aggregating visionary thinkers, influential financial figures, and edgy tech disruptors to recalibrate the payment landscape of the Nordic region. Plunge into captivating discussions that spotlight the intricacies of on-the-spot transactions. Converging stakeholders from Sweden, Norway, Denmark, Finland, and Iceland, this round table sets the stage to confront challenges, share pioneering insights, and craft collaborations that elevate the trajectory of instant payment modalities.
Venture into the vanguard of instant payments advancements with the UK & Ireland Instant Payments Round Table. As an elite regional gathering, we're bringing together the brightest luminaries, financial stalwarts, and pioneering tech minds to shape the future of payments in the British Isles. Dive into in-depth discussions that tackle the nuances of real-time payments. Drawing participants from across the United Kingdom and Ireland, this round table aims to navigate challenges, exchange unparalleled insights, and stimulate collaborations that amplify the momentum of instant payment innovations.
Explore the cutting edge of payment evolution at the DACH Instant Payments Round Table. As a premier regional symposium, we're rallying industry vanguards, esteemed financial luminaries, and groundbreaking tech architects to champion the modernization of payments across Germany, Austria, and Switzerland. Engage in insightful exchanges that delve deep into the world of instant payments. With representation from the heart of Central Europe, this round table endeavors to discern challenges, spread exemplary practices, and weave connections that supercharge the uptake of instantaneous payment systems.