Time to get on board with instant payment recognition
In April 2024, the European Union’s Instant Payments Regulation came into force, marking a significant shift in the landscape of cross-border payments. As CFOs across Europe grapple with the implications of this new regulation, recent research by Swift provides compelling insights into why instant payment recognition should be on every CFO’s radar.
The study, which surveyed over 2,000 decision-makers at Small and Medium Enterprises (SMEs) in France, Germany, Italy, and Spain, reveals a strikingly positive outlook on the regulation’s impact. A substantial 61% of respondents expect the new rules to significantly affect their businesses, with many anticipating concrete benefits.
Cost savings emerge as a primary advantage, with 44% of SMEs expecting the regulation to reduce their expenses. Improved cash flow, a perennial concern for businesses of all sizes, is anticipated by 27% of respondents. Perhaps most intriguingly, one in five SMEs believe the shift to instant payments will boost their competitiveness in the market.
These potential benefits are not merely abstract projections. Survey respondents provided tangible examples of how instant payments could transform their operations. One participant noted that the regulation would allow them to “gain time and be more efficient,” as suppliers often delay shipping goods until payment is received. Another saw it as “a great incentive to work with suppliers from abroad,” citing easier payment management and reduced expenses.
Central to the new regulation is the concept of Verification of Payee (VoP), mandated for cross-border payments within the Single European Payment Area (SEPA) by October 2025. The importance of this feature is underscored by the 83% of respondents who consider upfront beneficiary checks crucial. VoP aims to reduce errors and fraud by confirming the recipient’s details before a transaction is completed.
However, the implementation of VoP across borders presents challenges, particularly in terms of interoperability between different national schemes. This is where Swift’s role becomes pivotal. The financial messaging service is working to facilitate interoperability through its Payment Pre-validation solution, aiming to simplify compliance for financial institutions while ensuring the secure transmission of standardized financial data.
For CFOs considering investment in instant payment recognition, several factors warrant careful consideration:
However, these benefits must be weighed against the costs and challenges of implementation. CFOs need to consider the investment required in terms of technology, training, and potential process changes. The October 2025 deadline for VoP compliance also adds a time pressure element to any decision-making process.
It’s worth noting that despite the enthusiasm, instant credit transfers currently account for less than 13% of total transfers across Europe. This suggests that while the potential for growth is significant, widespread adoption may take time.
The Instant Payments Regulation is part of a broader effort to improve the European cross-border payments ecosystem. It follows the introduction of the European Payments Council’s One-Leg-Out Instant Credit Transfer scheme (OCT Inst) in November 2023, which Swift supports by connecting domestic instant payment systems within and outside of Europe.
In conclusion, the shift towards instant payments presents both opportunities and challenges for CFOs. The potential for cost savings, improved cash flow, and increased competitiveness is clear. However, the decision to invest in instant payment recognition should be based on a thorough cost-benefit analysis, taking into account the specific needs and circumstances of each business.
As the October 2025 deadline approaches, CFOs would do well to start their assessments sooner rather than later. The future of European business transactions is moving towards instantaneous, and being prepared for this shift could provide a significant competitive advantage in the years to come.