The instant payments space had been gaining significant traction in recent years, and access to immediate funds has become paramount for consumers and businesses in particular in the current pandemic. We launched the SEPA Instant Credit Transfer (SCT Inst) scheme almost three and a half years ago, and since then the scheme has kept on growing. We strongly encourage the further take-up of instant payments, which will enable European payment service providers (PSPs) to contribute to more innovation and harmonisation of payments in Europe. So here we're exploring the SCT Inst scheme’s most significant achievements, opportunities, challenges, and future goals.
We hope that these successful developments will incentivise PSPs that have not yet decided to rapidly join the SCT Inst scheme. If your institution plans to become an SCT Inst scheme participant, we would be happy to guide you through the adherence process.
SCT Inst’s growth and performance in a few key figures
As of April 2021, the scheme includes 2,310 payment service providers or PSPs from 23 countries in Europe – that is fifty-eight percent of the total number of SCT participants in SEPA and over sixty-eight percent of the total number of SCT participants in the euro area. More PSPs and additional countries will come on board over time.
SCT Inst growth since its launch.
When measured in terms of reachable payment accounts, the current SCT Inst penetration is even higher across the euro area as a significant majority of payment accounts is reachable for SCT Inst in twelve EU countries1. We are confident that these numbers will continue to grow over the months to come.
Map of the countries where PSPs are already offering SCT Inst services.
The volume of SCT Inst transactions in the fourth quarter of 2020 represented almost eight percent of the total volume of SCT and SCT Inst transactions in SEPA, compared to five-and-a-half percent in the fourth quarter of 2019. This rapid growth is expected to continue in the coming quarters.
Estimated share of SCT Inst volumes in total SCT + SCT Inst volumes.
Why should PSPs adhere to the scheme?
Instant payments have the potential to develop in the person-to-person and person-to-business segments in situations where cash and cheques are currently widely used. They may reduce the cost of managing cash and cheques, which are the most expensive means of payment at the level of the entire economy.
SCT Inst offers many benefits to all payment stakeholders, be they end-users or service providers. The main innovative characteristics are the following:
- SCT Inst's real-time nature: the scheme allows the electronic transfer of money across Europe in under ten seconds; in practice, virtually all successful SCT Inst transactions are completed within five seconds.
- Its permanent availability: at any time and on any day of the year, including weekends and holidays.
- Its targeted pan-European reach (progressively the full set of 36 SEPA countries).
- The multitude of use cases it supports: individuals, businesses, and government entities are able to use the SCT Inst scheme in many different circumstances.
The following recent developments make the SCT Inst scheme even more attractive for PSPs and payment end-users alike:
- Since 1 July 2020, the maximum amount per SCT Inst instruction has been set at one hundred thousand euros, further facilitating business-to-business transactions.
- The launch of the SEPA Request-to-Pay scheme (SRTP) on 15 June 2021 will complement the SCT Inst scheme across a broad range of use cases such as retail commerce transactions at physical or online point of interaction, proximity person-to-person transactions, and business-to-customer and business-to-business e-invoicing.
- The SEPA Proxy Lookup (SPL) scheme, which supports SCT Inst, facilitates interoperability between participating payment solutions by enabling the conversion of a proxy (mobile phone number, e-mail address) into a payment account identifier (IBAN) across SEPA.
The very creation of the SCT Inst scheme and its rapid development over its first three and a half years testify to the collective vision and support of European PSPs for real-time payments.
PSPs that intend to join the SCT Inst scheme should understand that they have to adapt their IT systems to make them real-time and available 24/7/365, as well as establish back-up arrangements, upgrade their operational and risk management processes such as fraud detection plus their clearing and settlement arrangements, and develop and promote this new service to their customers. The EPC therefore did not expect all PSPs from the 36 European countries to join immediately or even shortly after November 2017, but instead anticipated the take-up to be progressive over several years.
Notwithstanding the challenges PSPs face, the scheme is, so far, being deployed in line with expectations, and the EPC has not identified any significant obstacles.
Full SCT Inst roll-out
The EPC believes that a critical mass of SCT Inst scheme participants and reachable payment accounts is being attained in the euro area through a natural, market-based process based on the benefits of the SCT Inst scheme for end-users and PSPs. However, the EPC recognises the significant investment and operational changes required at PSP level.
In conclusion, two distinct targets could respectively be set: one for eurozone-based PSPs and one for PSPs outside the euro area. As shown above, the SCT Inst scheme’s penetration is already very broad across the euro area where the availability of SCT Inst is a reality for a vast majority of citizens, and a very significant majority of payment accounts are already reachable and usable for SCT Inst. It is important in this context to mention that the European Commission considers adherence to the SCT Inst scheme to be an urgent priority and a pre-condition for the full roll-out of euro instant-payment solutions as part of its recently published strategy for retail payments in the EU. Therefore, the first target is to be as close as possible to full coverage in terms of payment accounts by the end of 2022 within the euro area. A second target would be to achieve critical mass outside the euro area within the following two years.
1. Austria, Belgium, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, the Netherlands, Portugal and Spain
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