A white paper by EBA Clearing discusses why these four factors – including wide usability and reach – are important for the success of the EU's forthcoming instant payments scheme.

As the paper notes, instant payments in the EU come in the context of a changing European payments landscape. We've had the SEPA project's regulations to harmonise payment formats and payment instruments across the eurozone, and the Payments Services Directive (PSD) in 2009, followed by PSD2, currently being finalised. As well as regulation, technology has also prepared the way for mobile and e-payments, opening the door for new fintech players in the payments market.

The next step is the roll-out, from November 2017, of the SEPA Instant Credit Transfer (SCT Inst), a scheme developed by the European Payments Council (EPC), which will enable the execution of euro transactions between payment accounts in less than 10 seconds, 24/7, with immediate availability of the funds on the beneficiary’s payment account.

4 crucial factors for SCT Inst success

EBA Clearing identifies the following as crucial elements for the successful take-up of real-time payments:

1. Payment certainty: for payments where the funds are made available immediately, the payment must be guaranteed and risk free. Payment certainty has to apply for the payer, the payee and the payment service providers involved in the transaction.
2. A wide usability and reach: users need to be able to reach as many payment service providers and their customers as possible, as soon as possible after the launch of the real-time payment service.
3. Flexibility in supporting a wide variety of real-time products and services for payment users: different customers may need different services. This means that the underlying payment infrastructure should be flexible to support evolving propositions in the services layer.
4. Efficiency and cost effectiveness: as with all payment instruments and related infrastructures, efficiency and costs are of major importance. Aside from economies of scale and synergy-driven considerations, relevant infrastructure-related aspects in this context include efficient liquidity management arrangements.

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CTMfile take: It will be important for payment service providers in each of the SEPA markets to engage with these elements of instant payments, although EBA Clearing notes that each country will develop at its own speed.