New EU rules on SEPA instant transfers

Last updated - October 9, 2025

Regulation often paves the way to innovation, pushing fintech companies to build advancements that raise standards for the whole industry. A perfect example of this is the new set of EU rules on SEPA instant transfers.

Instant transfers used to be a nice-to-have. But thanks to the 2024 regulatory overhaul, they have become the new norm. People expect speed—but the EU recognized that speed without security is dangerous.

That's why, alongside the instant payment mandate, a crucial new security feature becomes mandatory on October 9, 2025: Verification of Payee (VoP). This real-time account name checking service prevents misdirected payments and potential fraud by allowing users to verify that account details match the intended recipient before completing a payment.

With Swan, if you’re a partner, you’re compliant by default. We also provide a custom VoP integration to improve user experience.

What are SEPA instant transfers?

Credit transfers used to be bound to the business hours of the payment service provider, so it could take longer for funds to appear. Then, in 2017, the European Payments Council introduced a system for facilitating instant transfers, through its “SEPA Instant Credit Transfer Scheme” (SCT Inst).

The scheme has the following three key characteristics:

• A target maximum execution time of 10 seconds
• A maximum amount of 100,000.00 euros per transaction
• Availability 24/7/365 (including during inter-bank holidays)

More details available in Swan’s Docs.

Instant transfers provide much smoother user experiences, but not all payment service providers were quick to adopt them, motivating the creation of new regulations.

The European Parliament passed a regulation mandating that transfers must occur within ten seconds.

The latest Single Euro Payments Area (SEPA) regulations aim to remove the barriers blocking the adoption of instant transfers. Instant transfers will now become the norm, setting a new benchmark for speed,  efficiency, and security.

Key changes include:

• Mandatory payer's confirmation:  Sender institutions must rigorously confirm the match between IBAN and beneficiary names before initiating transfers—an important measure for not only error prevention but also fraud.
• Cost parity: Instant SEPA services will be mandated to be provided at the same cost as regular SEPA transactions, underlining a commitment to fairness and eliminating any potential for unjust pricing.
• Universal acceptance: All banks and every payment service provider (PSPs) are now obliged to support SEPA Instant, promoting widespread accessibility and adoption.

Enhanced Security with Verification of Payee

While the instant payment mandate takes effect in early 2025, Verification of Payee becomes mandatory on 9 October 2025 for all Payment Service Providers (PSPs) in the Eurozone, with full SEPA zone coverage following.

But speed alone isn't enough—the EU recognized that instant payments needed enhanced security measures to match their rapid execution.

This is where Verification of Payee becomes crucial:

• What is VoP: A real-time account name checking service that prevents misdirected payments and fraud by verifying that account details match the intended recipient before payment completion.
• How it works: Users enter IBAN and payee name, the system verifies detail in under 5 seconds, returning one of four results: Match, No Match, Close Match, or Verification not possible.
• Benefits for users: Enhanced security, error prevention, and payment confidence—users know transfers will reach the intended recipient.
• Benefits for businesses: Reduced disputes, better user experience, and operational efficiency with fewer payment failures and reversals to handle.

The combination of instant transfers and Verification of Payee creates a powerful dual benefit: speed with security. When you're sending money to someone, you can instantly verify that the account details match the intended recipient before completing the payment. This provides peace of mind, reduces fraud risk, and streamlines the payment process with minimal friction.

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How financial institutions are adapting

If you work with financial institutions (like Swan) or are considering it, here’s what to look for to make sure they’re already adapting to the new reality of this regulatory framework:

• Real-time fraud checks: Institutions are gearing up for robust real-time fraud detection mechanisms, underscoring a commitment to security for instant transfers.
• Scheme Integration: The integration with a new scheme necessitates substantial investments in infrastructure and technology, ensuring seamless adoption and operation.
• Better confirmation processes: The mandatory IBAN and beneficiary name match confirmation means institutions must invest in advanced systems to validate payer information, reinforcing the integrity of every transaction.
• Intra-Day Ledger Updates: A paradigm shift for institutions used to daily batch operations, intra-day ledgers will establish new settlement rules. In real-time payment systems, banks settle funds between each other during the day. This means the system calculates how much each bank owes or is owed. At the end of a set time period, the banks settle these amounts through accounts they have with the central bank.

Embedding instant transfers with Swan

Swan is dedicated to anticipating the embedded banking needs of companies across Europe. We love to see European regulation supporting a landscape where instant transfers are the norm! People today expect speed, security, and accessibility from their payments.

Swan has proactively implemented Verification of Payee across all SEPA Credit Transfers, Instant Credit Transfers, and Standing Orders. Our solution provides automatic implementation by default, with no integration effort required for single transfers, and custom verification options for optimized user experiences in bulk operations. Users get immediate payment processing while having confidence their funds reach the intended recipient, significantly reducing both processing time and fraud risk.

With Swan’s embedded banking platform, any company in Europe can easily embed instant transfers in their own product to give their users the seamless payment experience they expect.

The October 2025 Verification of Payee mandate represents the final piece of the EU's comprehensive instant payments framework, ensuring that faster payments don't come at the cost of security or accuracy.

Chat with a fintech expert to explore how you could unlock the potential of your product by embedding banking features like instant SEPA transfers with integrated verification!

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