Your Essential Guide To Instant Payments Regulation (IPR)
A major change is coming into force in the EU payments landscape. From January 2025, the Instant Payments Regulation (IPR) will make fast, secure, and affordable transactions the norm, paving the way for a more efficient and inclusive financial ecosystem.
In this article, we’ll cover what the Instant Payments Regulation (IPR) is, its main provisions, and how it benefits businesses and customers alike.
What is the Instant Payments Regulation, or IPR?
The Instant Payments Regulation (IPR) is a new EU legislation that aims to promote the widespread use and adoption of instant payments across member states.
The IPR will require all payment providers to offer the possibility to transfer payments between bank accounts within seconds, 24/7 – including weekends and holidays.
Key objectives of the regulation include:
- Enhancing financial inclusion: The IPR aims to make instant payments accessible to consumers and businesses, improving the speed and efficiency of transactions.
- Strengthening the EU single market: The Instant Payments Regulation promotes uniformity in payment services to ensure seamless cross-border transactions.
- Fostering innovation and competition: The IPR encourages banks and payment providers to adopt new technologies and compete on a level playing field.
- Reducing costs for consumers and businesses: By bypassing intermediaries, instant payments aim to reduce transaction fees and delays.
The Instant Payments Regulation builds on the SEPA Instant Credit Transfer (SCT Inst) scheme, which has been available in the EU since 2017 and aims to make instant payments the standard rather than an option.
The 4 main provisions of the IPR
The Instant Payments Regulation has specific requirements designed to promote the adoption and consistent implementation of instant payments across the EU. These requirements ensure that instant payments are secure, accessible, and affordable for individuals and businesses.
Here’s an overview of the four main provisions of the IPR:
- Mandatory provision of instant payments
The IPR requires payment providers – such as banks and payment processors – to offer instant payment services for euro-denominated transactions. This applies to payment providers operating within the EU and handling transactions in euros. The purpose of this provision is to ensure that instant payments become the standard rather than a premium or optional service. - Cost parity with traditional payments
Under the IPR, payment providers can’t charge higher fees for instant payments than for traditional credit transfers. This removes cost barriers, encouraging widespread adoption by making instant payments affordable for consumers and businesses alike. - Fraud prevention measures
The regulation requires payment providers to implement robust fraud prevention systems to ensure the security of instant payments. The specifics of this provision include advanced monitoring, detection tools for suspicious transactions, and measures to prevent unauthorised access or fraudulent activity This provision builds trust in the system by ensuring instant payments are secure – an objective benefiting both consumers and businesses. - IBAN-name verification service
The IPR requires payment providers to offer IBAN-name matching services to check if the recipient’s name matches the IBAN before the payment is processed. This reduces errors and fraud related to misdirected payments – e.g. those caused by incorrect account details.
What are the benefits of the IPR for businesses and consumers?
The widespread use and adoption of instant payments across the EU comes with several key benefits – some of which we’ve briefly touched on.
Let’s take a closer look at how the IPR benefits consumers and businesses alike:
Speed and efficiency
It’s in the name! Instant payments allow transactions between accounts in seconds – regardless of the time of day or day of the week.
- For businesses, receiving payments instantly improves cash flow and liquidity. The IPR also speeds up cross-border transactions within the EU single market, enhancing the competitiveness of businesses engaged in international trade.
- For individuals, instant payments are particularly useful in urgent situations – e.g. paying for medical expenses or helping a friend in need. Individuals are able to send money without delay, reducing the stress surrounding urgent transfers.
With funds available in real-time, businesses and individuals alike benefit from being able to make financial decisions more dynamically – in other words, it improves financial planning for everyone.
Convenience and enhanced user experience
Unlike traditional banking systems, which operate only during business hours, instant payments work around the clock. Because they are accessible 24/7, transactions can be processed at any time.
This means users can enjoy seamless transactions without worrying about delays due to weekend closures or bank holidays. This enhanced convenience integrates smoothly with modern digital tools like mobile apps, making instant payments easy for everyone – tech-savvy or not.
The convenience of instant payments also encourages a shift from cash payments, promoting financial inclusion and reducing risks associated with handling physical cash.
Economic impact
Instant payments facilitate real-time commerce and reduce transaction costs, contributing to a more efficient, dynamic, and inclusive economy.
Along with money saved on processing fees and charges, this comes with a variety of additional benefits, including:
- Enabling businesses to reinvest money more quickly, driving growth and operational efficiency
- Encouraging banks and fintech companies to innovate and improve their services to meet the demand for instant payments
- Reducing small businesses’ dependence on credit lines, as they can access funds as soon as transactions occur
- Preventing economic activity from being slowed down by outdated banking infrastructure
Together, these benefits create a modern, dynamic, and more user-friendly financial ecosystem.
When will the Instant Payments Regulation be implemented?
The IPR was published in the Official Journal of the European Union on 19 March 2024 and entered into force on 8 April 2024.
Depending on whether the payment provider is sending or receiving instant payments, the IPR will apply in two phases:
- Phase 1: For receiving instant payments, the payment provider will have nine months from the date of the enforcement to comply with the IPR, meaning that by 9 January 2025, all bank PSPs in the EU must be able to receive instant payments from their customers.
- Phase 2: After 18 months, on 9 October 2025, all bank PSPs in the eurozone will be required to offer their customers the facility to send instant payments.
After this, for bank PSPs in non-eurozone member states, the deadline for receiving instant payments is 9 January 2027. For sending instant payments, the deadline is 9 July 2027.
Non-bank PSPs – e.g. electronic money institutions (EMIs) and payment institutions (PIs) – are expected to meet the same requirements for receiving and sending instant payments by 9 April 2027.
Want to know more about safe and secure instant payments?
If you would like to know about other key European regulations impacting payments in 2025, then please check out our latest payment regulations you need to know article. Or view our resources page to find other associated payments articles.
Brite Payments offers Instant Payments and Instant Payouts as part of its suite of payments products. If you would like to find out more about what makes Brite’s instant account-to-account payments perfect for pan-European consumer payments and refunds, then get in touch with our experts today.
