A study conducted by ClearBank indicates that Europe’s instant payments system is poised to surpass traditional credit transfers in the coming decade.
The research predicts that SEPA Instant Credit Transfers will dominate account-to-account payments in the eurozone by 2030, with these transactions accounting for approximately 18% of all euros denominated transactions by 2035.
Regulatory push under the Instant Payments Regulation
The EU’s Instant Payments Regulation mandates that banks, electronic money institutions (EMIs), and payment service providers, whether based in or outside the euro area, must be able to send and receive instant euro payments by July 2027. The regulation also ensures that instant transfers do not incur higher costs than standard credit transfers.
Sector Preparedness and Expenditure Forecasts
A survey of over 100 financial institutions in ten European markets by Celent highlights varying levels of preparedness. While all banks reported compliance with earlier SEPA Instant requirements, only half currently meet the 2027 standards. Nonetheless, most expect to meet these deadlines on time. Approximately one-fifth of non-bank providers anticipate missing the deadline by several months.
Budget projections reveal significant divergence between banks and other financial institutions. A majority of banks foresee costs exceeding EUR 20 million, with a notable segment expecting outlays up to EUR 100 million. In contrast, most non-bank providers anticipate spending below EUR 10 million.
Product Development and Competitive Pressures
Banks are more likely than non-bank providers to collaborate with corporate clients on new instant payment use cases. This shift in focus could impact product development strategies across the sector.
Additionally, regulatory changes under the Settlement Finality Directive create competitive pressures for EMIs, allowing them to apply directly for participation in SEPA clearing systems. Over 40% of surveyed EMIs intend to pursue direct access and have already done so in some cases. Many expressed willingness to reconsider banking partners if instant payment services fail to meet their expectations.
Future Trends
Officials from ClearBank and Plaid emphasize the growing importance of real-time settlement across Europe, driven by regulatory changes. Celent’s models suggest that with increasing migration to instant transfers, annual transaction volumes could surpass 90 billion by 2035.
