EU Instant Payments Regulation: What Businesses Need to Know

Martijn Bos
Head of Policy, Europe

What is the EU instant payments regulation?

Instant payments in the EU are no longer an optional feature, they are the regulatory baseline. With the EU’s Instant Payments Regulation (IPR) now fully in force, any euro-denominated account-to-account transfer within the Single Euro Payments Area (SEPA) must settle within 10 seconds, at any time of day, any day of the year. For consumers and businesses, this is a milestone for speed, trust, and innovation in European payments.

For anyone building open banking or Pay by Bank experiences, this shift is foundational. Instant payments are now mandated by law, and that unlocks powerful new use cases - with the guarantee that your funds arrive or land where they need to in under 10 seconds..

Why instant payments matter for EU businesses

Payment Initiation Services (PIS) were built for real-time experiences. But until now speed was limited by inconsistent infrastructure. The new regulation fixes that, laying the legal and technical foundation for seamless, fast, and secure account-to-account payments.

This update is a reset of the payments experience to give more power to consumers including:

• Real-time payments by default.

• Pay by Bank becomes simpler, faster, more effective, and more competitive.

• Reconciliation improves, reducing business overhead.

• Trust increases with built-in fraud mitigation like verification of payee.

What changes under the new EU rules

Here’s what’s now mandatory:

• Instant transfers: Credit transfers must settle within 10 seconds, 24/7.

• Verification of Payee (VoP): Customers must receive a free name to IBAN check to reduce fraud.

• Equal pricing: Instant payments must not cost more than standard SEPA transfers.

• Sanctions checks: Now conducted daily after transactions, not before.

• Improved access: Non-bank PSPs that offer SEPA payments can now access key settlement systems like TARGET and TIPS.

What does it mean for businesses using open banking?

If you’re already working with Plaid or a compliant provider, no action is needed. Your provider handles the technical and regulatory changes. 

But now may be the time to rethink user journeys. Instant refunds, real-time pay-ins, or on-demand payouts can become a core part of your customer experience. Get in touch with the Europe team today to find out more or speak to your account manager. 

How Plaid is powering instant payments across Europe

Plaid is actively monitoring SEPA Instant participation and performance across our partner banks, and working directly with EU financial institutions to support full compliance. We are offering SEPA Instant payment rails at no additional cost to our partners.

We’ve also launched Verification of Payee this month, making it easier to validate recipient information and prevent failed or fraudulent payouts. 

The Instant Payments Regulation is a turning point for the European payments ecosystem. It sets a new standard for speed and reliability, and lays the groundwork for wider Pay by Bank adoption across the continent. With non-euro EU countries expected to follow by 2027, this is just the beginning.

If you're ready to explore how instant payments can improve your customer journeys and expand your payment use cases, we’d love to talk.