Now the regulation has come into effect, immediate transfers must be priced the same as traditional, slower credit transfers, and banks will be required to offer a “Verification of Payee” service to help prevent fraud. What’s more, while non-EU financial institutions in the European Economic Area (EEA) have until 2027 to comply, and those in SEPA but outside the EU and EEA – like UK banks – face no set deadline, some PSPs may wrongly assume they’re unaffected. However, in practice, the operational and competitive pressures of SEPA compliance are likely to impact them nonetheless.

Rossana Thomas, vice president and head of payment solutions at Fiserv, comments on how financial institutions can thrive in a post SEPA instant payments landscape:

“Regulation and standards should be treated as more than a compliance box-tick – they provide the foundations for service levels that all providers should aim to function at, whether they are compulsory or not. Regardless of location, PSPs with multinational customers will be at a competitive disadvantage if they disregard SEPA instant payments.

“PSPs that thrive will be the ones that prioritise regulatory compliance while updating legacy systems, including cloud migration and real-time fraud monitoring tools. For instance, banks ought to consider adopting adaptive machine models that adjust to new fraud patterns. These models differentiate genuine transactions from abnormal ones by analysing contextual signals like location, device, and transaction history, rather than static parameters.

“This new regulation calls for a shift in focus – from the transaction itself to the wider customer experience. As a result, PSPs must strive to future-proof their solution. This can be done through a centralised, global payment hub that streamlines processes to handle a range of transactions and integrates existing applications – such as account processing and anti-money laundering – with new payment initiatives, catering to the customer’s varying needs.

“Such a hub helps financial institutions fulfill the demand for secure and flexible real-time payments, both domestically and internationally. As 24/7 instant payments increasingly become standard practice, it is essential for all PSPs to participate if they are to thrive.”