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Instant payments with immediate availability of funds is the next step

Instant payments with immediate availability of funds is the next step

Michael Schilder

Product Manager

12 December 2014

Instant payments with immediate availability of funds is the next step


Instant payments, person-to-person mobile payments and contactless payments; these are the next steps in retail payments, now the introduction of the Single Euro Payments Area (SEPA) was a success. That is, according to the Euro Retail Payments Board.

The board decided to set up two streams: person-to-person mobile payments in euro, and card- and mobile-based contactless proximity payments in euro and their respective mandates. The first working group is expected to report back by the end of June 2015, the second group by the end of November 2015.

On 19 December 2013 the ECB announced the launch of the Euro Retail Payments Board (ERPB), which helps foster ‘the development of an integrated, innovative and competitive market for retail payments in euro in the EU’. The ERPB’s work consists mainly of identifying strategic issues and work priorities (including business practices, requirements and standards) and ensuring they are addressed.

In its second meeting, on 1 December 2014, the ERPB decided to step up work on the topics of instant payments in euro, and person-to-person mobile payments and contactless payments.

Instant payments are defined as electronic retail payment solutions available 24/7/365 and resulting in the immediate or close-to-immediate interbank clearing of the transaction and crediting of the payee’s account with confirmation to the payer (within seconds of payment initiation). This is irrespective of:

  • the underlying payment instrument used (credit transfer, direct debit or payment card)
  • the underlying arrangements for clearing (whether bilateral interbank clearing or clearing via infrastructures)
  • the settlement (e.g. with guarantees or in real time) procedure that make this possible


The ERPB stated that in a competitive market, providers should not adopt a ‘silo’ approach offering closed-loop non-interoperable instant payment solutions. Instead a ‘layered’ approach should be taken by developing solutions for end-users to make payments with increased speed, leveraging on the current payment instruments (first layer) and the underlying clearing and settlement infrastructures (second and third layers). Such solutions should take advantage where possible of the harmonisation and integration already achieved with the SEPA project, preventing the emergence of a fragmented European market for instant payments in euro.

To prevent this fragmented market, the ERPB agreed on:

  • the need for at least one pan-European instant payment solution for euro open to any payment service provider (PSP) in the EU
  • inviting the supply side of the industry (in close cooperation with the demand side and with the active involvement of the European Payments Council as a potential scheme developer) to make an assessment of the issues related to pan-European instant payment solutions in euro to be presented at the ERPB meeting in June 2015.