Europe Set to Scale A2A Payments with New Instant Payments Regulation

January 9th 2025 is the implementation deadline for all banks in the eurozone to receive instant payments. This is arguably one of the most significant deadlines for European payments innovation since PSD2 came into force seven years ago.

Now, with all banks across the entire eurozone being required to connect to the instant payments infrastructure in 2025, Europe is finally poised to realise the A2A payments opportunity at scale.

From January 9th, all banks in the euro area will be required to receive instant payments. So if a consumer pays from a bank that supports instant payments at checkout, it is guaranteed that Pay by Bank will move the money into the merchant’s euro bank account in under ten seconds. 

What’s more, from January 9th, every bank offering instant payments must also ensure that the levy on the customer is no higher than normal credit transfers. In other words, the initiation of instant payments will be free of charge for most consumers.

Jan Van Vonno, Head of Industry and Wallets at Tink, said, “In recent years, we have seen instant payment services explode in markets such as Brazil, Thailand and India – with these three markets alone accounting for 179 billion transactions in 2023, according to central bank data.

“Meanwhile in the EU, progress has been uneven and fragmented – despite the 2017 SEPA Instant Credit Transfer Scheme promising to usher in a new normal. By levelling the experience across the EU with the arrival of eurozone-wide instant payments, we overcome one of the major barriers to instant A2A payments going mainstream.”

IPR will drive uplift in Pay by Bank

Van Vonno continues, “IPR will encourage greater adoption of Pay by Bank – a payment method that is fast, simple, secure, low cost and reliable. For merchants, it provides absolute certainty and confidence – they can see the funds arrive in their account in seconds. This eliminates the need for any kind of payment guarantee scheme, and helps them manage cashflow and remain liquid in an operating environment when working capital might be squeezed.”

“It also provides the necessary certainty to support cross-border commerce as merchants can be completely confident that within seconds they will receive funds from any transaction from anywhere within the eurozone. For consumers, it provides speed, control and simplicity – wherever they shop across the eurozone.”

According to the European Savings and Retail Banking Group, 96% of the EU population own a bank account – that means Pay by Bank is the most inclusive payments service available to consumers and merchants on the continent.

Van Vonno concludes: “That’s why the implementation of IPR is a major innovation milestone for payments in Europe – taking us a big step closer to creating a pan-European payment solution that is available to everyone.”