Let’s discover the new and immediate bank transfers in Euro.
Europe has seen a long-standing industry effort to connect its banking system – first by SEPA (Single Euro Payment Area) and now SEPA instant, which is a pan-European system for instant bank transfers in Euro.
We prefer and enjoy when things work out instantly. Different mobile apps made us accustomed to real-time payments and interactions. This made us anticipate instant payments beyond mobile – via our bank accounts – and it’s pretty much here.
The beauty of SEPA instant, or SCT Inst, is how fast it connects the still fragmented Euro-zone market. It opens up new possibilities for trade, e-commerce and provision of services across the continent. We still don’t have full coverage but we are getting there.
Here are all the things you can learn when it’s time to send money with an instant bank transfer:
1. When was SEPA instant launched?
The diversity of nations, currencies, local payment systems and cultures within the relatively new European Union have been an obstacle for uniting the banking system with immediate bank transfers. SEPA instant aims to connect the people and businesses with a new and very quick cross-border payments system because they match the speed of domestic bank transfers.
The idea for instant interbank payments was first pitched in 2015 by the European Payments Council (EPC). This came as an effort to match shifted expectations of retail, corporate and consumers. The official launch of SEPA instant was in November 2017, attempting to enable enough coverage to support real-time bank transfers.
2. What exactly is SEPA instant?
It is a payment network – a solution or scheme if you wish – that lets you send and receive bank payments in Euro, 24/7/365. Confirmation and crediting of the recipient’s account happen within seconds. The speed is independent of your account provider’s underlying payment clearing and settlement arrangements. So long both payment institutions involved in the transfer are participants in SEPA instant, the transfer should be near-instant or up to 10 seconds by definition.
3. Why is SEPA instant needed if many EU countries have instant domestic transfers?
European businesses have gotten used to instant domestic payments which are available in Belgium, Bulgaria, Denmark, England, France, Poland, Portugal, Romania, Spain, Sweden, to name just a few. That’s not enough to unite the market!
The benefits of instant cross-border payments in Euro are obvious. Business can start moving more quickly than before, which in turns could increase GDP throughout the continent and our competitiveness in the international market. The additional benefit is getting better service at the same cost, which is an additional stimulus for money exchanged between people and businesses
4. What is the main difference between SEPA vs. SEPA Instant?
There is quite a difference between the two Euro transfer schemes. It all started with:
The standard SEPA takes a long time because transfers are processed in batches. Depending on your financial institution, these may be submitted for clearing multiple times each business day. This is the reason SEPA transfers sometimes arrive in the recipient’s account within the same day.
But that was not fast enough to make businesses around Europe more resilient. That’s why the European Payment Services introduced the:
SEPA instant handles transactions differently – at a granular, transactional level. This enables nearly instant clearing and settlement.
5. Who can send and receive SEPA Instant?
The service is only available to businesses and consumers who send money from a SEPA Instant participating institution to another account provider who has adopted the payment scheme. In other words, if your bank has integrated with this optional scheme, then you can take advantage of its speed and convenience.
You can find the full list of participating institutions on the official site, or you can always inquire whether your account provider can send and receive SEPA Instant.
6. What is the maximum amount I can send or receive via SEPA instant?
The rules of SEPA Instant state that you can send or receive a maximum of 15,000 Euro at a time. Exceptions do exist, but very rarely – the limit can be higher, up to 100,000 Euro, but that depends on bilateral agreements between participating institutions. Incoming SEPA Instant credit transfers to iCard accounts are limited to 15,000 Euro.
7. How long does SEPA instant actually take?
The maximum allowed execution time within the SEPA Instant network is 10 seconds to finalise payments. This time should be sufficient in 99.99% of the time for the beneficiary bank to report to the originating institution.
8. Can a SEPA Instant transfer be unsuccessful?
Exceptional circumstances: In critical situations, the beneficiary bank may receive an extension and should send a response within 20 seconds of the initial timestamp. If none arrives, a “time-out” rejection is confirmed to the network.
After 25 seconds of the initial timestamp, if no response is received, the sender bank may initiate another query, requesting a status for the original payment.
9. Can a SEPA instant transfer be cancelled?
Yes, both the sender and the sending institution can request a cancellation of SEPA Instant.
The sender may have an option to request a cancellation, usually by contacting the sending institution, or sometimes an option would be available within your mobile banking or digital wallet. You will need to specify a reason, your account provider will handle your request and the recipient will make a decision to return the transfer or not. You may request the SEPA instant transfer back within 13 months after the initial timestamp.
The sending institution can also request a cancellation request to the beneficiary institution for reasons beyond customer dealings. This is only possible within 10 business days from the original settled transaction. The recipient’s bank has up to 15 business days to send a YES or NO response. In the case the reversal is accepted, the beneficiary bank may decide to charge a fee for the service and you will receive less money than you originally sent.
10. Are there any conditions to cancel a SEPA instant transfer?
The sender who is initiates a SEPA Instant return can use any personal or business reason to request the money back.
A sending institution can request a cancellation for only 1 of the 3 following reasons:
- Duplicate sending
- A technical problem that resulted in a wrong transaction
- Fraudulent send instructions
11. Which countries does SEPA instant cover?
The payment scheme is designed for all countries that use or are pegged to the Euro. These are a total of 44 countries and autonomous territories. The adoption of the immediate payments is still ongoing until it reaches 100% coverage of Euro payment processors in the SEPA zone.
The jurisdictions covered by SEPA Instant include:
The 27 EU countries:
And the following countries, autonomous regions and territories:
Aland Islands (Finland)
Canary Islands (Spain)
Isle of Man (UK)
12. What is the current adoption of SEPA instant?
Official data reports that 2,079 payment institutions have already joined the payment infrastructure. They represent 22 countries and approximately 50% of all payment providers there are in the EEA.
13. When will SEPA Instant be available for all EU bank accounts?
The new standard for cross-border payments is an initiative that is not mandatory. However, the pressure from businesses and consumers onto banks does take its toll and we see a fast adoption within the first 3 years of launch.
We can only speculate, but since that’s the case, we would probably see full coverage within the next 5 years.
14. Can I send and receive SEPA instant with iCard?
We were one of the first wave of institutions to integrate with the scheme before the service was temporarily suspended for our users. We re-opened the SEPA Instant scheme and right now you can receive SEPA instant to your iCard IBAN accounts in Euro. Very soon, we will announce the new sending facilities for real-time account-to-account transfers.
You can stay up to date with new developments by following iCard’s facebook page.