Instant Payment Regulation

With the introduction of the Instant Payments Regulation (IPR) 2024/886 on April 9, 2024, European payment transactions are facing a fundamental transformation. The regulation obliges payment service providers to offer SEPA real-time transfers (instant payments) as standard. This marks the beginning of a new era for the eurozone, in which money transfers will have to be processed within seconds in future - 24 hours a day, 365 days a year.

Although SEPA real-time transfers have been possible since 2017 and are offered by many financial institutions, their use has so far been limited.

The main aim of the regulation is to oblige all payment service providers that offer SEPA payments to their customers to be able to receive real-time transfers from January 9, 2025 and to be able to send them from October 9, 2025.

The implementation of the IPV presents payment service providers with numerous challenges.  They must meet a number of deadlines and requirements by 2027, otherwise they face potential penalties and risks.

• Instant payments must be possible 24/7, 365 days a year and be received by the payee within 10 seconds
• The name and IBAN of the payee must be verified (VoP – Verification of Payee)
• The EU sanctions lists must be compared with your own customer base on a daily and event-based basis
• Reporting to the banking supervisory authority on the amount of charges for payment accounts, credit transfers and real-time transfers as well as the proportion of refused
• payment executions (differentiated according to national and cross-border payment transactions)
• The costs for real-time credit transfers may not be higher than for conventional SEPA credit transfers
• Adjustments to liquidity management due to possible short-term increases in liquidity requirements during the day and on weekends and public holidays

The introduction of the Instant Payments Regulation (IPR) 2024/886 marks a clear turning point for European payments as SEPA real-time credit transfers become mandatory. However, the implementation of the regulation also poses a number of challenges, particularly with regard to compliance requirements and the necessary technological adjustments.

KPMG offers comprehensive solutions to support payment service providers in complying with the new regulatory requirements. By combining regulatory advice, implementation expertise and technological solutions know-how from KPMG, payment service providers can ensure that they meet the new requirements while improving the efficiency and security of their payment processes.