5 SEPA instant payments benefits

SEPA payment is a euro-only system that has a newly-designed centralized architecture, which allows it to be the main way of transferring funds throughout Europe already for over a decade now. Thus, since early 2008, nearly all electronic bank transfers in Europe were processed as SEPA payment.

Nevertheless, some transactions may require up to a few business days to process, and the unsatisfying speed of such payments is the system’s main drawback. Is there a solution?

Meet the Instant Money Operation

In 2015, the design of a new instant payment add-on to the SEPA network has started. Dubbed officially SCTInst, it was to offer fast payments using the existing infrastructure that runs standard SEPA payment network.

In Spring 2019, the SEPA instant payment network went live. By now, instant payments are available for over 520 million users in 22 European countries. The SCTInst is offered by more than 2,000 payment service providers, which makes up to 51% of all PSPs in Europe.

Your Instant Payment is Truly Instant

SEPA Instant Transfer allows processing transactions of up to 100,000 EUR in under 10 seconds, around the clock, every day of the year.

This speed not only offers the comfort of fast transacting, but also allows using cheap and comfortable wire transfers for more things that would otherwise not be possible, such as offline payments for goods and services, where the merchant can be sure they got paid already before you exit the store.

Real-time payments allow producers of goods to order raw materials for order right away, which speeds up its turnover time, and increases the business’ throughput. It also provides economic benefits to the community, because more orders mean more taxes paid.

The Credentials are Same

SEPA Instant Payment is not a completely new system, but rather an upgrade to the existing usual SEPA network. To send an instant payment, you would need to provide the very same IBAN you have used for normal transfers previously. If you and your receiving party have the SCTInst set up, chances are, you don’t even need to select anything, and you usual payment will be processed as an instant payment, automatically.

Less Frills, Less Fees

The instant money operation is also cheaper as it doesn’t have any incoming fees, and there is no need to develop additional instruments as it uses the existing SEPA code for merchants, banking apps, and other software.

Online merchants who would like to accept instant payments, can simply flip the switch in their online banking, and that’s it. The payment system connected to the website will accept instant payments with no additional setup at all.

Macroeconomic Benefits

Apart from the aforementioned potential increase of value for the community in the form of increased tax income, there’s another factor in how the introduction of SEPA instant payment schemes plays a positive role in the economy. By having real-time payments, banks can get ahold of the incoming funds an put them to work as credits or outcoming payments in a matter of seconds.

This way, instant payments increase the liquidity of the available funds and allow the economy to optimize its processes and provide more economic benefits having fewer funds on hands, and for less time.

Security Above All

By using instant payments directly, without any superstructure in form of 3rd party payment systems or applications with simplified access, people and banking institutions remove possible points of fraud or interruption.

Currently, instant financial operations that involve only the PSPs and SEPA network, require just a few AML and fraud detection operations on their respective levels, which can be ran in a few seconds. Adding new levels, be it branded payment systems, usage of payment cards or contactless technology, adds time, and, most importantly, new points for potential interruption of secure financial service.

The Future is Now

We’re living in such an era when speed is a competitive advantage rather than a preference. Boost your business and improve your daily life with SEPA instant payment right in your Swaggy Premium account today!