This time of the year is very special for the European Payments Council (EPC): the Single Euro Payments Area (SEPA) Instant credit transfer (SCT Inst) scheme is celebrating its fifth anniversary! To mark this occasion, we are sharing the most significant achievements of the SCT Inst scheme, its opportunities, challenges, and future goals.

Where we are today?

The SCT Inst scheme was successfully launched in November 2017. Since then, the SCT Inst scheme has just kept growing although at a slower pace since 2021. According to the latest data published in November 2022, the scheme now includes 2,313 PSPs from 29 European countries (the readiness date for the Croatian PSPs is 1 July 2023). They represent over sixty percent of European PSPs and more than seventy-one percent of PSPs in the euro area.

Moreover, a very large majority of payment accounts are reachable for SCT Inst in 15 countries: Portugal, Spain, France, Belgium, Netherlands, Germany, Austria, Slovenia, Italy, Greece, Slovakia, Lithuania, Latvia, Estonia, Finland. 

Over thirteen percent of all euro credit transfers in the third quarter of 2022 were SCT Inst transactions, compared to about ten percent in the third quarter of 2021. This growth is expected to continue in the coming quarters.

SCT Inst payments deliver value to PSPs and their customers

Instant payments have the potential to develop in the person-to-person and person-to-business segments in situations where cash (and in some countries cheques) are currently still widely used. This would 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:

• SCT Inst is real-time; the scheme allows the electronic transfer of money across Europe in under ten seconds, and in practice, ninety-nine percent of successful SCT Inst transactions are completed within five seconds.
• SCT Inst is constantly available at any time and on any day of the year, including weekends and holidays.
• SCT Inst has a targeted pan-European reach, progressively aiming for the full set of 36 SEPA countries.
• SCT Inst supports a multitude of use cases; individuals, businesses, and government entities are able to use the SCT Inst scheme in many different circumstances.
• 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; this amount will increase in future. 

Furthermore, the SEPA Request-to-Pay scheme (SRTP) complements the SCT Inst scheme across a broad range of use cases such as retail commerce transactions at physical or online points of interaction, proximity person-to-person transactions, and business-to-customer and business-to-business e-invoicing. 

To put it simply, the SCT Inst scheme provides the instant certainty that the payment is done, and the combination of both the SRTP and SCT Inst schemes facilitates a new way to ‘orchestrate’ the payment process for euro transactions.

Furthermore, the SEPA Proxy Lookup (SPL) scheme, which can also support SCT Inst, facilitates interoperability between participating P2P (Person-to-Person) payment solutions by enabling the conversion of a proxy (mobile phone number, e-mail address) into a payment account identifier (IBAN) across SEPA.  

Additionally, the SEPA Payment Account Access (SPAA) scheme, which will be released by the end of November 2022, may also leverage the SCT Inst scheme. 

Digital transformation of payments

SCT Inst covers the full SEPA geographical scope of 36 European countries and territories, marking a major change in European payments and offering a tremendous opportunity for PSPs to continue to satisfy their customers in the digital age and in a harmonised way across Europe, which could be a good example for other regions of the world.

It is also worth mentioning in this context, the standardisation work carried out by the EPC in coordination with interested stakeholders in the area of mobile-initiated SEPA (Instant) credit transfers (MSG MSCT). In June 2022, the EPC published a document entitled “Standardisation of QR¹-codes for MSCTs” and is now working on a new document on “Interoperability of MSCTs based on NFC² or BLE³ ” which is planned to be submitted to a eight week public consultation towards the end of 2022. 

The Covid pandemic accelerated ongoing trends like a reduction in cash usage, an increase of instant, contactless and e-commerce card payments and growth in mobile account-to-account payments, so market evidence suggests that new payment solutions based on SCT Inst are being progressively developed and adopted. We strongly encourage the further take-up of instant payments, which will enable European PSPs to contribute to more innovation and harmonisation of payments in Europe. We hope that all 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.

The recently announced initiative of the European Commission in the area of instant payments may give a further impetus to SCT Inst adherence and usage.

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