The widespread use of instant credit transfers will not only change the payment habits of citizens, businesses and administrations across Europe, but will also streamline and accelerate the flow of money in the economy. It will also pave the way to digitalisation, financial innovation and competition in the provision of payment services, stimulating economic activity. Spain is a front-runner to continue leading this digital transformation and benefit from all the advantages it brings.

What are instant transfers?

Instant credit transfers allow the instant transfer of funds between accounts, being instantly credited to the beneficiary, and available for users at any time of the day and every day of the year through online banking, banking apps, branches or services such as Bizum.

With almost all Spanish bank accounts (more than 80 million accounts) available to send and receive instant credit transfers thanks to their connection to Iberpay’s payment system which provides them with the necessary interbank rails to process any payment service based on instant credit transfer (in accordance with the European Payments Council's SCT Inst scheme).

Since its launch in 2017, instant credit transfers have emerged as the perfect means of payment for a modern, digital and efficient economy. Characterized by their instantaneity (the money is credited to the beneficiary's bank account in less than 1 second on average), by their operation 24 hours a day, every day of the year and by their use through digital and mobile channels, they are redefining the way we pay and collect in our economy.

Value proposal of instant credit transfers:

• They are available 24x7 and the funds are made available instantly to the benefiaciary 

• For all payments in euros, in the 36 countries of the SEPA area: With over 4,000 banks and 800 million accounts in Europe

• They are a universal means of payment, being available in all accounts, through any channel and for multiple use cases

• Just-In-Time treasury management: Facilitating real-time payments management for companies and public administrations

• Europe's strategic and financial autonomy from other monetary areas and non-European actors

• They promote economic growth, increasing the speed of money, economic activity, and adding growth to GDP 

• Instant credit transfers are also key to improving crosscurrency payments, following the objectives of the G20, EU and BIS.  

Why are instant payments important?

Means of payment are the circulatory system of a country's economy. Payments facilitate the flow of funds between individuals, companies and administrations, generating commercial and economic activity while stimulating economic growth.

Given this context, it is not surprising that the European Commission and the European Central Bank identified instant credit transfers as one of the central pillars of their strategy on retail payments due to its undoubted potential to increase levels of competition, digitalisation and innovation, and also its ability to benefit the continent's citizens and businesses. In addition to this, the mass adoption of instant payments would improve Europe's financial sovereignty and autonomy by facilitating the implementation of alternative European payment solutions to the major international card brands.

Spain emerges as a leader in Europe in the adoption of instant credit transfers with a share of 53% of the total credit transfers processed.

The adoption of instant credit transfers among businesses, the launching of Request to Pay (24/7, enriched and digital instant direct debit) and the use of instant credit transfers in multi-currency international payments appear as the next steps to complete the wide range of opportunities presented by instant credit transfers for all economic agents.

Regulation for instant credit transfers

The Regulation on instant credit transfers, approved by the European Parliament on 7 February 2024, aims to generalise their regular use among citizens, businesses and public administrations across Europe in order to achieve its strategic objectives in terms of payments: sovereignty and strategic autonomy from other economic areas, the development of payment solutions on a pan-European scale, accelerating the speed of money circulation to improve the efficiency of the economy and stimulating economic growth, fostering the digitalisation of the European economy and promoting innovation, competition and sustainability in payment services.

The regulation is directly applicable in each Member State of the European Union and, among the new features it incorporates, the following issues stand out for their relevance and impact:

• Obligation to offer instant credit transfers: Banks offering ordinary credit transfers to their customers must also offer instant credit transfers.
• Channels and information for customers: Banks must make instant credit transfer services available to their customers through the same channels (banking apps, online banking, business channels, bank-branches, etc.) in which they already offer ordinary credit transfers.
• Prices: The prices of instant credit transfers may not be higher than those of ordinary credit transfers.
• Anti-fraud: Banks must offer their customers a service that allows to verify the name of the beneficiary and ownership of the destination account prior to sending the payment, in order to avoid errors and prevent fraud.
• Payment and e-Money Institutions are subject to this regulation after the update of Directive 98/26/EC, which enables the participation of this type of entities in payment systems under conditions similar to those of banks

Although Spain leads the adoption of instant credit transfers in Europe, its use is still very concentrated in low-value payments between individuals, whilst in companies (payment of invoices to suppliers, collections from customers, payrolls, expenses, etc.), public administrations (pensions, collections, fees, grants, fines, taxes, etc.) or in payments in stores, the use of instant credit transfers is being much more limited.

With the possibility of using instant credit transfers under identical conditions to ordinary credit transfers, businesses will have the opportunity to adopt this means of payment in a massive and standardized way, bringing many benefits in terms of efficiency and automation of their payments. This approach allows them to significantly optimize and streamline their cash flows by facilitating instant payments at any time of the day, 365 days a year. Moreover, the agility of instant credit transfers offers companies a highly effective tool to adapt and respond to new market dynamics and to consumer needs and preferences in an unquestionable context of digitalization.

Taking it a step further, companies can implement embedded payments, integrating the payment into the entire value chain of their financial transactions and business processes through the application of end-to-end APIs, upgrading the customer's experience and enabling the programming of these payments in advance. By implementing this technology, businesses can achieve instant reconciliation of invoices, collections, and bank accounts automatically and in real time. To conclude, this approach will revolutionize financial management in the business context, helping companies to concentrate on their most critical operations, solving their management problems efficiently, providing them with a better payments experience, as well as enabling them to escalate their transactions exponentially thanks to the simplification of processes.

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