58% Of European Banks Consider New SEPA Instant Payment Deadline Unrealistic
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Most European banks are facing a tough challenge concerning the timelines set by the European Union for executing the SEPA instant payment. RedCompass Labs revealed in a report that 58% of the 200 surveyed senior payment professionals find the timelines unrealistic.
The Chief Executive Officer of RedCompass Labs, Tom Hewson, stated that the European Union’s new regulation shows that instant payment will be transformed in Europe soon. This significant paradigm shift comes with major difficulties for European banks who are spearheading this revolution, Tom mentioned.
Many European Banks Consider Transforming Instant Payment
He continued, revealing that the majority of these banks know this initiative won’t be easy. They would upgrade their infrastructure to enable them to cover downtimes, and outages, and also cope with higher volumes. Furthermore, these financial institutions will transform core banking, limit management, liability, and fraud detection systems into highly scalable, easily accessible, and available 24/7.
The research shows that most European banks underestimate the amount of payments they must process per second. On average, these banks are expected to be processing around 101 and 300 payments per second before the end of 2025.
However, about 5% of European banks announced that they aim to reach the 1,000 transactions per second milestone. With bulk payment files, which can contain multiple payments, European banks should be able to process 1,000 payments per second.
The top five banks facing challenges in providing instant payments are modifying customer channels. They are implementing KYC and provision of sanctions screening (21%), offering an authorization of payee service (25%), and growing a business case for enhanced instant payment solutions (20%). These are also processing larger volumes (22%), and providing 24/7 service availability (20%).
Bank Customers Demand Fast And Instant Payment Options
The survey shows that there is a strong demand from customers and businesses for instant, more convenient, and faster payment options. The customer’s demand has driven the need for banks to invest and improve their instant payment systems to satisfy the new regulation mandate.
Banks have recognized that instant payments produce new opportunities like displacing card providers fostering competitive dynamics and offering better services to their customers.
The European Union is a political and economic union among 28 European countries. Together, they have developed a zone of sustainable development, democracy, and stability, while preserving individual freedoms, tolerance, and cultural diversity. The union is devoted to sharing its values and achievements with people and countries beyond its borders.
The five major European Union institutions are the European Council, the European Parliament, the Court of Auditors, the Court of Justice, and the European Commission.
