The views expressed in this article are solely those of the author and should not be attributed to the European Payments Council.

Instant payments are shaping the future of cross-border transactions. In this interview, Juan Luis Encinas Sánchez, CEO of Iberpay, discusses the company’s participation in the One-Leg Out (OLO) Instant Credit Transfer (OCT Inst) scheme and its impact on international instant credit transfers. He shares insights into the benefits for financial institutions and customers, the challenges of implementation and the future of cross-currency payments in Europe and beyond.

What does Iberpay’s participation in the OCT Inst scheme mean, and what specific role does it play in supporting international instant credit transfers?

Iberpay’s participation represents a natural evolution in our role as a payment processor. Since our foundation in 2005, we have grown from a domestic retail payments processor to a European player with the launch of SEPA in 2008. Iberpay has also played a key role in the implementation of instant payments, both as a pioneering infrastructure and as part of the banking community deploying these payment instruments. 

OCT Inst is now enabling Iberpay to foster a more efficient, accessible and globally integrated instant payments ecosystem. It supports the processing and settlement of the first or last mile of multi-currency international transactions within the SEPA region – including bilateral and multilateral agreements, instant payments based on correspondent banking, internalised processing by major banks and other models. 

We are also enabling the instant processing and settlement of global euro transactions that have an origin or destination within or outside the SEPA area and that take place within the eurozone or other currency areas. Iberpay has a special focus on Latin America but we are also open to supporting instant payment corridors with other regions.

What advantages does the OCT Inst scheme offer to payment service providers and their customers?

Iberpay has fully integrated the OCT Inst scheme into its instant payments service as an additional functionality that does not require costly investments. The same processes, controls and monitoring systems used for SEPA Instant Credit Transfer (SCT Inst) since 2017 can be applied to OCT Inst transactions. Additionally, Iberpay’s superset approach facilitates the combined use of SCT Inst and OCT Inst in the same message, providing greater flexibility to banks and enhancing the usability of instant payments across different transaction types. 

The OCT Inst scheme also benefits from a network effect. Instant payments have been widely deployed and adopted since the implementation of the Instant Payments Regulation amending the SEPA Regulation, ensuring one hundred percent account reach, ultra-fast processing and cost efficiency. Banks can rely on existing fraud prevention and detection systems, such as Iberpay’s sectoral antifraud service Payguard, to enhance security. Moreover, OCT Inst and SCT Inst share the same liquidity management, monitoring and support framework, simplifying operational oversight for financial institutions. 

Another key advantage is automatic connection to the SWIFT GPI tracker, ensuring full traceability of international transactions at all times. The infrastructure can also support innovative new services, i.e. enabling Bizum’s interoperability beyond the eurozone.

What were the main challenges Iberpay faced while preparing for the scheme?

Iberpay first needed to successfully onboard financial institutions. To date, 36 Spanish entities have already joined the EPC’s OCT Inst scheme and Iberpay’s service. This includes 15 direct participants, three represented entities with direct connections and 18 indirect participants, covering 92.5 percent of the instant payments market share in Spain. Fifty-two more institutions are expected to join soon.

Beyond onboarding, Iberpay must ensure that banks are able to generate value from cross-currency instant payments while balancing operational costs and regulatory compliance efforts. The cost efficiency of instant payments, achieved through economies of scale and an established infrastructure, provides a strong foundation. 

However, banks need to integrate foreign exchange (FX) services in a 24/7 environment, ensure seamless liquidity management and align their business models. Additionally, fostering customer adoption is critical to making this new payment channel competitive. Close collaboration between payment service providers (PSPs), regulatory bodies and international partners is essential to making instant cross-border credit transfer transactions both scalable and economically viable.

Another structural challenge is that few countries have enabled their instant payment systems for cross-currency transactions. Additionally, banks have different levels of readiness and strategic focus. Some are more internationally oriented while others primarily serve domestic markets, leading to different speeds of adoption. 

Banks will also soon face significant operational and regulatory hurdles, particularly in offering FX services and complying with anti-money laundering (AML), countering the financing of terrorism (CFT) , politically exposed persons (PEP) screening and sanctions list filtering. 

Finally, Iberpay needed to secure the necessary investment approvals from banks at a time when they were heavily engaged in compliance-driven projects. That meant demonstrating the long-term value and efficiency gains of OCT Inst through extensive dialogue with multiple areas within banks, including compliance and global transaction banking.

How do you see the scheme influencing the future of cross-border payments in Europe and beyond?

The OCT Inst scheme will undoubtedly enhance the speed, efficiency and transparency of cross-border transactions, making them more accessible and cost-effective for financial institutions dealing with the G20 objectives and rising customers expectations. 

Enabling the OCT Inst scheme for transactions within Europe would facilitate seamless payments between eurozone and non-eurozone countries. To increase the  influence of the OCT Inst scheme, we should automatically extend participation to entities that are already part of SCT Inst. 

By actively engaging in this shift, banks can stay ahead of market trends and meet a growing demand. The OCT Inst scheme provides a strong foundation for financial entities to modernise their services, expand their reach and reinforce their role in a rapidly evolving global payments ecosystem.