From bulk payments to payee confirmation, the EU's Instant Payments Regulations offer new opportunities for treasurers, even beyond real-time transfers.
New regulations from 2025
Thanks to digitalization, banking services are increasingly available around the clock and instantly. The EU Regulation on Instant Payments, which came into force in April 2024, is the European Union's response to this trend, driving the widespread introduction of SEPA instant transactions for companies and consumers.
The new regulation obliges banks to enable the receipt of real-time euro transfers by January 2025 and the sending of such transfers by October 2025. Transaction costs should not exceed those of conventional SEPA transactions. For treasurers and corporate customers, this regulation presents both opportunities and challenges.
Beyond the requirement for single instant payments, the new set of rules also include requirements for bulk payments and introduces a new fraud-prevention tool in the form of the Verification of Payee (VOP).
Paying salaries in real time
The regulation on bulk payments will allow supplier or salary payments to be processed in real time: banks must convert bulk payments directly into individual payment orders to the payees, with no upper limit on the amount per payment.
Additionally, the new payee validation requires banks to match the IBAN and the payee's name for each transfer, this regulation also applies to classic SEPA transfers. After a request to the recipient's institution, the originator is informed via a traffic light system whether the IBAN and the payee's name match completely, partially, or not at all. For corporates, this means enhanced protection against fraud, such as CEO fraud or authorized push payment fraud.
Pre-check payment details
However, this VoP service is likely to pose challenges for corporates, especially with bulk payments. Hundreds of negative responses could quickly arise, delaying payment execution. Many banks therefore offer corporate customers the option to check their payment data in advance. The regulation also allows treasurers to opt-out from the VOP for (bulk) orders. For incoming funds, companies must ensure that the correct data is available to the instructing party.
For treasurers, one significant advantage of the EU regulation on instant payments is likely to be increased cost efficiency. Real-time transactions will enable them to manage their company's liquidity at any time with split-second precision, thereby reducing costs.
However, treasurers will not only face challenges but also significant opportunities.To reap the full benefits close cooperation with banks will be essential. Topics such as bulk processing or VOP require intensive coordination.