SEPA Instant Payments Push Banks and B2B Payments Into the Future

Innovation traditionally moves faster than regulation.

Except, as it seems, when it sometimes comes to modernizing legacy banking and payments core infrastructure, where regulation can get the edge.

As covered here, nearly three-quarters of banks (73%) remain unprepared for compliance with the ISO 20022 financial messaging standard and its looming March deadline in the U.S. The messaging formats support a global movement toward real-time payments, which will likely have an impact on cross-border payments, multinational operations and global B2B growth.

In the European Union (EU), the Single Euro Payments Area (SEPA) instant payment framework is live as of Thursday (Jan. 9), requiring financial institutions and payment service providers to be capable of receiving instant payments.

Traditional SEPA payment systems allowed banks and payment providers several hours to conduct due diligence — verifying transaction legitimacy, identifying potential fraud and ensuring compliance with anti-money laundering (AML) regulations.

SEPA instant payments, however, truncates this timeline. Transactions must now settle in fewer than 10 seconds, 24/7, across participating countries. This real-time capability addresses rising demands for faster, more transparent financial services, but it also presents challenges that could reshape the way businesses — particularly B2B firms— handle key elements of cash flow, risk management and compliance.

Read more: EU’s Instant Payments Deadlines Loom With Challenges for X-Border Payments

Instant Payments and Operational Transformation

The shift to SEPA instant payments doesn’t just affect payment timelines; it necessitates broader operational changes. Accounts receivable (AR) and accounts payable (AP) teams will need to adapt to the new reality of 24/7 payment processing. Traditional batch processing systems, designed around end-of-day reconciliation, may no longer suffice.

At the very least, instant payments could require a paradigm shift in treasury operations, with operational upgrades that could also extend to enterprise resource management (ERP) and financial management systems.

In the “Real-Time Payments World Map,” PYMNTS found there were more than 266 billion real-time transactions recorded worldwide in 2023. That number is slated to hit 575 billion transactions by 2028.

At its core, SEPA instant payments offers potential benefits to B2B companies. Faster settlement means improved liquidity management — a critical factor in an environment where supply chain disruptions and inflationary pressures continue to strain working capital.

Jim Colassano, senior vice president, RTP business product management at The Clearing House, said the ability to send money instantly, 24/7/365 has been gaining wide embrace across a variety of use cases — including business users.

“The feedback that we get, not only from consumers, but also from the business community, is that when you see it,” he said of instant payments, “when you actually experience it, both from an origination standpoint and from a receiving standpoint, you want to do more, you want this to be the payment mechanism that you would like to use.”

For businesses relying on just-in-time inventory models or facing cash flow constraints, the ability to receive payments instantly can be a game-changer. Suppliers, for instance, can fulfill orders more confidently when payments are guaranteed in seconds rather than hours or days. Buyers, meanwhile, gain greater flexibility in managing outgoing payments to optimize their cash positions without risking late fees or strained supplier relationships.

By eliminating delays traditionally associated with cross-border transactions, SEPA instant payments reduces friction for European firms operating within the single market. This capability also aligns with the broader shift toward global real-time payment networks, enabling European businesses to compete more effectively on the international stage.

Read more: More Than Half of US Companies Use Real-Time Payments

Instant Compliance Remains a Hurdle

The PYMNTS Intelligence report “Overcoming Obstacles to Widespread Real-Time Payments Adoption” found that although 90% of banks said their customers (including corporate end-users) would benefit from instant payments, 34% of banks said they believe their core systems, some dating back to the 1970s, cannot manage the speed and volume required by real-time payments.

Among the challenges are the compressed timeline for due diligence, which raises significant pain points for financial institutions and their B2B clients. Instant payments leave no room for manual intervention or delays for fraud checks — processes that have historically served as critical safeguards.

Banks and payment service providers must increasingly rely on advanced technologies like artificial intelligence and machine learning to perform fraud detection and AML checks in real time.

The PYMNTS eBook, “12 Ways Instant Payments Delivers Value Across the Financial Ecosystem,” found that instant methods are transforming cash flow management, especially for microbusinesses. In fact, nearly one-third of SMBs now primarily receive ad hoc payments via instant methods, rapidly displacing traditional checks.

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