Instant Payments Regulation
The Instant Payments Regulation (IPR), which was adopted by the European Parliament and the Council on 13 March 2024, is aimed at accelerating the roll-out of instant payments in Europe and covers credit transfers denominated in euro within the European Union. It amends the Single Euro Payments Area (SEPA) Regulation and adds specific provisions on instant credit transfers in euro to the Regulation on cross-border payments in the Union, the Settlement Finality Directive (SFD) and the Payment Services Directive (PSD2).
Main requirements of the IPR
Instant credit transfers
Payment service providers (PSPs) that offer the service of sending and receiving credit transfers shall also offer the service of sending and receiving instant credit transfers (Article 5a).
Equality of charges
Any charges levied by a PSP for sending and receiving instant credit transfers shall not be higher than the charges levied by that PSP in respect of sending and receiving other credit transfers of corresponding type (Article 5b).
Verification of payee
PSPs shall offer the payer a service ensuring verification of the payee to whom the payer intends to send a credit transfer (Article 5c); this applies to both standard and instant credit transfers. This service shall be offered free of charge to the payer.
Simplified sanctions screening
PSPs offering instant credit transfers shall verify periodically, and at least daily, whether any of their payment service users are persons or entities subject to targeted financial restrictive measures (Article 5d).
Implementation
The timeline for the implementation of the various requirements of the IPR follows a staggered approach. Table 1 provides an overview of the main implementation deadlines set out in the IPR.
Table 1
|
Service/requirement |
Concerning |
Implementation deadline |
|
Receiving instant payments |
Euro area Member States |
9 January 2025 |
| Non-euro area Member States |
9 January 2027 |
|
|
Electronic money institutions and payment institutions in euro area and non-euro area Member States |
9 April 2027 |
|
|
Sending instant payments |
Euro area Member States |
9 October 2025 |
|
Non-euro area Member States |
9 July 2027 |
|
| Electronic money institutions and payment institutions in euro area Member States |
9 April 2027 |
|
|
Electronic money institutions and payment institutions in non-euro area Member States |
9 July 2027 |
|
|
Outside business hours from payment accounts denominated in national currency in non-euro area Member States |
9 June 2028 |
|
|
Equality of charges |
Euro area Member States |
9 January 2025 |
| Non-euro area Member States |
9 January 2027 |
|
|
Verification of payee |
Euro area Member States |
9 October 2025 |
| Non-euro area Member States |
9 July 2027 |
Verification of payee service
A Verification of Payee (VoP) service informs payers of any discrepancies between the payment account identifier given and the name of the intended payee. Payers will get a result (i.e. “match”, “close match”, “no match” or “other”) before initiating the payment, thereby mitigating the risk of fraud.
The Eurosystem is exploring the introduction of a VoP service for euro credit transfers, including instant credit transfers, in accordance with the IPR, with the aim of offering such a service in 2025. The European Payments Council has developed a rulebook for the VoP scheme.
Access for non-bank payment service providers to designated payment systems
In addition to the specific provisions for instant payments, there are also more general amendments addressing payment institutions (PIs) and electronic money institutions (EMIs), collectively referred to as non-bank payment service providers (non-bank PSPs). Non-bank PSPs are eligible to participate in designated payment systems subject to specific conditions (Article 35a PSD2 and Article 2 SFD).
In July 2024 the Eurosystem defined a harmonised policy to allow non-bank PSPs to access central bank-operated payment systems, including TARGET. Starting in April 2025, non-bank PSPs meeting certain requirements will be able to access TARGET, including T2 (for settling payments) and TIPS (for settling instant payments). The requirements will be set out in the TARGET Guideline and will be the same as those that currently apply to credit institutions.