Instant Payments in Europe Are No Longer Optional. That's a Big Opportunity for Banks and PSPs.

For years, instant payments in Europe were a nice-to-have. Good idea, uneven rollout, limited reach.

That phase is over.

With Regulation (EU) 2024/886, instant euro transfers moved from optional product to core infrastructure. In plain terms: if you offer regular euro credit transfers, you now have to offer instant ones too, with strict timing, pricing, and fraud-control requirements. The market has shifted from pilot mode to scale mode, and that changes the economics for everyone.

Europe just forced the network effect to happen

The regulation set hard milestones:

• Euro area PSPs had to receive instant payments by 9 January 2025

• Euro area PSPs had to send instant payments (and provide Verification of Payee) by 9 October 2025

• Non-euro area timelines extend into 2027 and 2028 depending on scope [1][2]

It also sets the service standard: instant means 24/7/365, with funds made available in about 10 seconds [2].

This matters because payments are network businesses. Adoption was always slow when only part of the market was reachable. Mandatory reach changes that. As of 9 January 2026, EPC data showed 2,810 PSPs in SCT Inst versus 3,523 in SCT, a much tighter gap than most people expected this quickly [3].

The growth is already visible in the numbers

Infrastructure and usage data show clear acceleration:

• ECB's TIPS settled 1.35 billion instant payments in 2024, up from 269.8 million in 2023 (about +402%) [4]

• In euro-area retail payment systems, instant credit transfers reached 23% of credit transfer volumes in H1 2025 [5]

• Consumer-side awareness and usage are catching up: in 2024, 62% of euro-area respondents said they had access to instant payments, and 45% said they had used them [6]

So this is not just compliance theater. It's becoming behavior.

Where banks and PSPs actually benefit

The common mistake is to think instant payments are only a cost center. They're not. They're a margin and product design opportunity if you treat the rail correctly.

1) Better cash-flow products for business customers

Instant settlement improves treasury outcomes for SMEs and enterprises: faster collections, faster disbursements, less idle liquidity, better working capital visibility.

For banks and PSPs, that unlocks product value in real-time merchant settlement, intraday liquidity services, and premium payout/disbursement products (marketplaces, gig payroll, insurance claims).

2) Lower rail cost, better pricing flexibility on overlays

At infrastructure level, TIPS transaction pricing remains very low (EUR 0.002 per transaction) [7]. Meanwhile, regulation caps the core instant-transfer price relative to regular transfers [1][2].

That sounds restrictive until you read the strategy implication: monetize the layers above the rail, not the rail itself.

The regulation itself explicitly points to opportunities for PSPs to build value-added payment solutions at point of interaction (POI), including initiation and related services [2].

3) Fraud controls can become a competitive advantage

Verification of Payee is now mandatory and free to the payer in scope markets [1]. That gives every bank and PSP a trust baseline.

At the same time, fraud pressure is shifting: the EBA/ECB report shows overall fraud rate stable in percentage terms, but total fraud value rising to EUR 4.2 billion in 2024, with payer-manipulation scams growing [8].

Providers that combine speed, confidence checks, and intelligent alerts will win more primary payment relationships.

4) Stronger European payment autonomy

The Commission has been explicit that instant-account-to-account rails can reduce dependence on non-EU payment providers and expand European payment choice, including at the point of sale [9].

For banks and PSPs, this is strategic leverage: better control of domestic payment economics, more room to differentiate, less dependency on external scheme dynamics.

The real strategic choice

In 2026, every provider in Europe is asking some version of the same question: are we implementing instant payments as a compliance checkbox, or as a product platform?

Checkbox players will absorb cost. Platform players will use instant rails to build new merchant, treasury, and risk products that are harder to replicate and easier to monetize.

The regulation forced adoption. It did not decide who captures the value. That part is still open.

Sources