What are instant payments?
Instant payments are credit transfers that reach the payee's account within ten seconds, at any hour of any day. In the EU, Regulation (EU) 2024/886 obliges every payment service provider that offers credit transfers in euro to offer instant credit transfers too. The German term is Echtzeitüberweisung.
Published . Last reviewed .
Instant payments in brief
| Term | Instant payment, instant credit transfer. German: Echtzeitüberweisung. |
|---|---|
| Legal source | Regulation (EU) 2024/886 of . It inserts Articles 5a to 5d into Regulation (EU) No 260/2012, the SEPA Regulation. |
| Scheme | SEPA Instant Credit Transfer (SCT Inst) of the European Payments Council, launched in November 2017. |
| Time limit | 10 seconds from the receipt of the payment order to the credit on the payee's account (Article 5a(4)(c)). |
| Dates in the euro area | Receiving by . Sending and verification of the payee by . |
| Settlement | TIPS, the service of the Eurosystem, charges 0.2 euro cent per transaction. |
What is an instant payment in banking?
An instant payment in banking is a credit transfer from one payment account to another that is executed at once. The EU definition is in Article 2(1a) of the SEPA Regulation: an instant credit transfer is "a credit transfer which is executed immediately, 24 hours a day and on any calendar day".
What are instant payments for the ECB? The ECB describes them as credit transfers that make funds available in a payee's account within ten seconds of the payment order (ECB, instant payments). All instant credit transfers in euro follow the SCT Inst scheme of the European Payments Council.
How do instant payments work?
Instant payments work in the order that Article 5a(4) of the SEPA Regulation sets out. How does an instant payment work between two banks? In four steps.
- The payer's provider checks at once that the funds are there. It reserves or debits the amount and sends the transaction to the payee's provider.
- The payee's provider credits the amount within 10 seconds of the receipt of the order and confirms the credit to the payer's provider.
- The payer's provider tells the payer, free of charge, whether the money has arrived.
- If no confirmation arrives within 10 seconds, the payer's provider restores the payer's account to its state before the transaction (Article 5a(5)).
The credit value date is the day of the credit. A customer can set a maximum amount for instant credit transfers, per day or per transaction (Article 5a(6)).
What is SEPA Instant, and what is the difference between SEPA and SEPA Instant?
SEPA Instant is the short name of the SEPA Instant Credit Transfer scheme. The difference between SEPA and SEPA Instant is the time limit and the hours of service. How does SEPA Instant work for a bank? The scheme holds the rules that banks follow, and the law sets the 10 seconds.
| SEPA Instant vs SEPA credit transfer | SEPA credit transfer | SEPA Instant credit transfer |
|---|---|---|
| Time to the payee | Up to one business day (OeNB) | 10 seconds |
| Hours | Bank business days | 24 hours a day, every calendar day |
Does SEPA Instant work on weekends? Yes. The law counts every calendar day, so a transfer on a Sunday has the same 10 seconds. Under Article 5b the charges for an instant credit transfer are not higher than the charges of the same provider for other credit transfers of the same type.
What does the SEPA instant payments regulation require?
The SEPA instant payments regulation, Regulation (EU) 2024/886, requires four things of a provider, each with its own date.
| Duty | Euro area | Other member states |
|---|---|---|
| Receive instant credit transfers in euro | ||
| Send instant credit transfers in euro | ||
| Charges not higher than for other credit transfers | ||
| Verification of the payee |
Payment institutions and electronic money institutions in the euro area have until for sending and receiving. Verification of the payee compares the name and the IBAN before the payer authorizes the transfer, and it is free of charge. Under Article 5d, providers check at least once every calendar day whether a customer is subject to targeted financial restrictive measures of the EU.
SEPA Instant vs TIPS: which is the scheme and which is the system?
SEPA Instant is the scheme, and TIPS is one system that settles its payments. TARGET Instant Payment Settlement (TIPS) is the platform of the Eurosystem, launched in November 2018. It settles instant payments in central bank money around the clock, and it processes a transaction in under 100 milliseconds (ECB, TIPS). TIPS settles in euro, Swedish krona and Danish krone. Since 2022, providers in the SCT Inst scheme that are reachable in T2 must be reachable in TIPS.
Instant payments vs real time payments: the two terms name the same kind of transfer. EU law and the ECB say instant payments. SIX writes that its Swiss system SIC processes payments in real time.
Instant payments in Germany, Austria and Switzerland
In Germany and Austria the SEPA Regulation applies directly, with the dates of the euro area. BaFin writes that all credit institutions in Germany have had to verify the payee of a transfer since , for instant and for conventional transfers in euro (BaFin, verification of payee). In Austria, the Oesterreichische Nationalbank publishes the same dates for banks and payment service providers.
Switzerland is outside the EU, so Regulation (EU) 2024/886 does not apply there. Instant payments in Swiss francs run through Swiss Interbank Clearing (SIC), which SIX Interbank Clearing operates on behalf of the Swiss National Bank. Bank customers in Switzerland have been able to make instant payments since August 2024 (SNB, ). SIX states that such a payment reaches the other account within 10 seconds. This page gives no legal advice.
Sources
- European Union: Regulation (EU) 2024/886 as regards instant credit transfers in euro,
- European Union: Regulation (EU) No 260/2012 on credit transfers and direct debits in euro,
- European Central Bank: Instant payments, read on
- European Central Bank: What is TARGET Instant Payment Settlement (TIPS)?, read on
- BaFin: Verification of payee, read on
- Oesterreichische Nationalbank: SEPA Instant Credit Transfer, read on
- Swiss National Bank: The Swiss Interbank Clearing (SIC) payment system, read on
- Swiss National Bank: Fast and available round the clock: what instant payments mean for households, companies and financial institutions,
- SIX: SIC payment system, read on