Instant Payments Become Mandatory – The End of the Bank Delay Trick

With Regulation (EU) 2024/886 of March 13, 2024, the European Union mandates all payment service providers to offer instant euro transfers – 24/7, 365 days a year, with a maximum execution time of 10 seconds (Art. 5a(3)). As of October 9, 2025, traditional bank processing times will be history. Most notably: instant transfers must not cost more than standard transfers (Art. 5b(1)).

What Changes with the New EU Regulation?

Many technical features that were previously optional are now legally mandated. The new legal framework provides clarity for banks, businesses, and consumers.

• Availability (Art. 5a(1)(2)): Payment accounts must be reachable for instant transfers every calendar day, around the clock.
• Price Parity (Art. 5b(1)): Fees for instant transfers must not exceed those of traditional SEPA transfers.
• Recipient Verification (Art. 5c(1)): The payer must be informed of any mismatch between the recipient's name and IBAN before execution.
• Sanctions Screening (Art. 5d(1) in conjunction with Recital 25): A daily screening of customer data against sanctions lists is sufficient, instead of individual transaction checks.
• Liability (Art. 5c(8)): Payment service providers are not liable for misdirected transfers if recipient verification was properly performed.
• Deadlines (Art. 5a(8)): Receiving instant payments becomes mandatory from January 9, 2025; sending from October 9, 2025.

Why Is This Happening Now?

What Is a Bank Transfer, Technically?

A customer's account balance legally represents a claim against the bank. A transfer is not a physical money movement, but rather an assignment of this claim: the payer instructs their bank to transfer their claim to the recipient's bank, which then credits the recipient’s account with a new claim. It’s an internal bookkeeping process between banks – not an actual exchange of money. These amounts are abstract units, representing claims, not tangible assets.

Technically, instant transfers – even on weekends and holidays – have been possible for decades. The necessary IT infrastructure has long existed. What was missing were clear legal mandates.

Why Was Political Action Needed?

According to Recital (2) of the Regulation, usage of instant transfers in the EU was previously unsatisfactorily low – prompting legislative action. A commonly raised suspicion: banks may have profited from delays, particularly via interest gains. The regulation doesn’t explicitly state this, but Recital (7) notes a lack of “incentive to invest” – an indirect reference to economic self-interest.

Theoretical Example

With approx. €5 billion in daily transfers and an interest rate of 4%, a one-day delay could yield €547,000 in theoretical daily interest. Over a year, this could amount to €130–200 million depending on liquidity ratios.

Even if purely hypothetical, this example shows that delays in payment processing can generate significant interest gains. With the new regulation, that’s over: transfers must now happen in real time, and artificial interest profits from delays are no longer possible.

What Does This Mean for Businesses?

Businesses also stand to benefit – if they prepare accordingly. Key advantages include:

• Immediate payment receipt – ideal for online sales and advance payments
• Improved liquidity management thanks to real-time posting
• Faster processes: payrolls, refunds, and batch payments become more efficient
• Fewer payment defaults: the psychological hurdle to paying is reduced, especially in spontaneous purchases

Action Items for Companies

• Check whether your bank supports instant transfers
• Update ERP and accounting systems for real-time processing
• Adjust checkout processes and e-commerce integrations

Conclusion

With Regulation (EU) 2024/886, the EU establishes a binding framework for fast, secure, and fair payment processing. The technology was already there – now it’s the law. What was once a silent business model for some banks is now regulated. For companies and consumers, this is good news: payments become predictable, transparent, and instantly effective.