Launched by the European Payments Council (EPC) in November 2017, the Single Euro Payments Area (SEPA) Instant Credit Transfer (SCT Inst) is an instant payments scheme enabling euro credit transfers within the SEPA area to be made in under 10 seconds. SCT Inst works like a regular SEPA credit transfer but much faster, and is open and accessible to users and service providers 24/7.

An open-ended list of SCT Inst use cases demonstrates situations where instant payments could bring additional benefits to payers and payees – for example, buying goods from another person; purchases from online stores; and insurance claims payments. Almost three years on, the scheme has grown significantly, and the EPC would like to highlight progress since the launch, its benefits, the remaining challenges, and further goals.

The SCT Inst scheme has grown steadily: the latest register of participants, published in September 2020, reveals that it includes 2,254 payment service providers (PSPs) from 22 countries in Europe – or 56% of total SCT participants and almost two-thirds of PSPs in the euro area. The EPC is confident these numbers will continue to grow.

In addition, the volume of SCT Inst transactions in Q2 2020 covered about 6.5% of the total volume of SCT and SCT Inst transactions in SEPA, having grown steadily quarter-by-quarter since Q1 2019, when the figure was just 1.02%. Over 99% of transactions are completed in under five seconds and, to date, no significant fraud issue has been reported.

SCT Inst is open to users and service providers 24/7

Instant payments are the closest substitute to cash, with the potential to develop in the person-to-person and person-to-business segments in situations where cash and cheques are widely used. They may reduce the cost of managing both, 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. These include:

• Its real-time nature: the scheme allows the electronic transfer of money across Europe in less than 10 seconds;
• Its permanent availability: 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); and
• The multitude of use cases it supports: individuals, businesses and government entities all use the SCT Inst scheme.

To join the SCT Inst scheme PSPs must adapt their IT systems to make them real-time and available 24/7, as well as establish back-up arrangements; upgrade their operational and risk management processes such as fraud detection and their clearing and settlement arrangements; and develop and promote this new service to their customers. The desire for speed, convenience and security are the most crucial factors in the success of new technologies or methods. However, consumers will only adopt new payment methods when they perceive them to be superior to those they already use. A seamless and user-friendly experience is critical in this regard. The SCT Inst scheme, and innovative solutions based on it, can help European PSPs respond to their customers’ evolving payment needs.

Finally, the SCT Inst scheme still needs to keep evolving to meet market demand. New features already implemented include a repayment functionality (added in November 2019), while the maximum amount per SCT Inst transaction recently increased to €100,000, which helps to facilitate business-to-business transactions. More features will be developed in line with the EPC’s scheme management process, which involves interested stakeholders, closely following market needs. It is worth highlighting the EPC’s ongoing development in partnership with stakeholders of a request to pay scheme, for which a first rulebook is scheduled for a November 2020 release.

The EPC remains at the forefront of modernising European retail payments. The SCT Inst scheme – coupled with other initiatives that augment the potential of real-time payments – will make payments more convenient and efficient for consumers, merchants, companies, public administrations and PSPs, and ultimately enhance the competitiveness of the European economy. These achievements would not be possible without the active contributions of PSPs and other stakeholders.

Javier Santamaría has been Chair of the European Payments Council since 2012