What is SEPA instant – Your guide to sending real-time payments

With today’s increasingly digital economy, consumers and businesses alike have found themselves in need of fast and easy options for sending payments across borders.

Although instant payment solutions have been around for a long time in many countries in Europe, they are limited to only domestic transfers or among the same payment service providers. However, since the introduction of the European Union scheme – SEPA instant, immediate cross-border transfers have become a fact.

But what are SEPA instant payments? Who can benefit from them and how do they work?

The answers to all these questions you can find by reading on.

What are SEPA instant payments and how do they work?

Built on the foundations of the traditional SEPA Credit Transfer scheme, SEPA instant is a European Union initiative, launched in November 2017 to facilitate immediate cross-border payments.

In other words, the scheme allows people to send money straight away to any third-party accounts within the Eurozone. It usually takes 10 seconds for the funds to settle (in rare cases, up to 20 seconds). 

Making an instant transfer is just like initiating any other regular bank transfer, the only difference being that your payment will be processed immediately, regardless of the day and hour.

When your financial institution receives your payment request, it will recognise it as an instant and will execute it right away.

However, there are several conditions for a payment to go through and those are:

• Payments can be sent only to recipients with euro accounts
• The maximum amount that can be sent is 100 000 EUR
• Both the payer’s and the recipient’s bank should be participants in the instant SEPA scheme, which is different from the regular SEPA

SEPA vs SEPA instant

The main difference between SEPA (Single Euro Payments Area) transfers and SEPA instant transfers is the way they are processed.

The former are processed by banks in batches. This means that no matter at what hour of the day you send a payment, it will be put into a big batch and submitted for clearing at the end of the working day. This, in turn, can delay the settlement of funds for several days.

In contrast, the latter type of transfers are regarded independently and processed 24/7. As soon as the payment service provider receives the payment request and recognises it as an instant, they will process it directly. 

It is also important to mention that while a payment service provider may fall within the SEPA zone, this does not necessarily mean that they take part in the scheme, as well.

You can check whether your bank or the recipient’s bank supports instant SEPA by referring to the register of participants, published on the website of the European Payments Council (EPC). Note that the list can change with time, so make sure to always check the latest version.

What are the benefits of instant SEPA transfers?

When it comes to immediate transactions, the first and most obvious advantage is that they are processed right away, allowing swift transfer of money across the entire Eurozone.

This essentially means user-friendly payment options for individual clients, as well as improved cash flow and real-time access to funds for business owners.

However, the advantages of the scheme do not stretch only to its speed. Other benefits include:

• Convenience – starting a SEPA instant transfer is a straightforward process and the maximum amount that can be sent is €100,000. All this helps to make payments of large sums quite easy and simple.
• Flexibility – The feature is available for anyone with a euro account, whose payment provider is a participant in the scheme, regardless of the used underlying payment instrument or clearing and settlement arrangements.
• 24/7 availability – Transactions are processed regardless of the day and hour you initiate the payment. Even if you want to send money overnight or on the weekend, the payment will be processed straight away.

Key takeaways

The SEPA instant scheme enables real-time processing of cross-border payments within the Eurozone. The scheme is an initiative of the European Union and was created to help individual clients and business owners alike.

Transactions are executed 24/7, take only 10 seconds and can be made by anyone as long as their bank is a member of the scheme.

Disclaimer: Please be aware that the contents of this article and the myPOS Blog, in general, should not be interpreted as legal, monetary, tax, or any other kind of professional advice. You should always seek to consult with a professional before taking action, since the particulars of your situation may materially differ from other cases.