European Banks Grapple with SEPA Instant Payment Deadline: 58% Deem Unrealistic
The majority of the European banks are facing a difficult situation regarding the timelines set by the EU for implementing instant payments. A survey by RedCompass Labs revealed that 58% of payment professionals find the timelines stipulated by the EU unrealistic.
Embracing the SEPA Instant Payments
According to the survey, which involved 200 senior payment professionals, there is a looming uncertainty over the readiness of banks to facilitate SEPA instant payments. One of the key findings of this research is that European banks are underestimating the volume of payments they need to process per second.
While the average target is between 101 and 300 payments per second, experts suggest that aiming for at least 1,000 payments per second is imperative, considering the magnitude of bulk payment files.
The journey towards SEPA instant payments is riddled with challenges for European banks. The top five hurdles include adapting customer channels, implementing KYC and sanctions screening provisions, scaling throughput, creating value-added offerings, and ensuring 24/7 availability.
Tom Hewson, the Partner and CEO at RedCompass Labs, mentioned: “Europe is taking a leap forward with new legislation that will make around-the-clock instant payments the new normal. This is an exciting development, but the deadlines are tight. Banks, already extremely stretched delivering the migration to ISO 20022, must be able to send and receive instant payments by the end of 2025. That’s a big ask.
Challenges
Despite these challenges, there’s a silver lining for European banks. A significant 77% believe that the benefits of instant payments outweigh the costs. Moreover, there’s a growing demand for instant payment products and services, with 89% of respondents acknowledging the trend.
The adoption of new rules for instant Euro transfers by MEPs marks a significant milestone in Europe’s journey towards instant payments. The legislation aims to promote SEPA integration, strengthen the Euro’s international role, and reduce reliance on foreign payment schemes.
Expect ongoing updates as this report evolves.
The majority of the European banks are facing a difficult situation regarding the timelines set by the EU for implementing instant payments. A survey by RedCompass Labs revealed that 58% of payment professionals find the timelines stipulated by the EU unrealistic.
Embracing the SEPA Instant Payments
According to the survey, which involved 200 senior payment professionals, there is a looming uncertainty over the readiness of banks to facilitate SEPA instant payments. One of the key findings of this research is that European banks are underestimating the volume of payments they need to process per second.
While the average target is between 101 and 300 payments per second, experts suggest that aiming for at least 1,000 payments per second is imperative, considering the magnitude of bulk payment files.
The journey towards SEPA instant payments is riddled with challenges for European banks. The top five hurdles include adapting customer channels, implementing KYC and sanctions screening provisions, scaling throughput, creating value-added offerings, and ensuring 24/7 availability.
Tom Hewson, the Partner and CEO at RedCompass Labs, mentioned: “Europe is taking a leap forward with new legislation that will make around-the-clock instant payments the new normal. This is an exciting development, but the deadlines are tight. Banks, already extremely stretched delivering the migration to ISO 20022, must be able to send and receive instant payments by the end of 2025. That’s a big ask.
Challenges
Despite these challenges, there’s a silver lining for European banks. A significant 77% believe that the benefits of instant payments outweigh the costs. Moreover, there’s a growing demand for instant payment products and services, with 89% of respondents acknowledging the trend.
The adoption of new rules for instant Euro transfers by MEPs marks a significant milestone in Europe’s journey towards instant payments. The legislation aims to promote SEPA integration, strengthen the Euro’s international role, and reduce reliance on foreign payment schemes.
Expect ongoing updates as this report evolves.
