With Instant Credit transfers set to become the new normal in Europe, Instant Payment Regulation (IPR) is poised to bring transformative changes to the payment ecosystem. For instant, there are many challenges and opportunities of the Instant Payment Regulation (IPR) in 2025.
While the benefits have been discussed and noted — instant payments, the possibility of new innovative products, and increased customer satisfaction—the path to meeting IPR mandates is not being talked enough.
For Banks, PSPs, EMIs, PIs and other financial institutions, developing a good understanding of the challenges and turning those into opportunities is key to winning in the competitive market.
Challenges of Implementing Instant Payment Regulation (IPR)
1. Technological Overhaul
Only business days processing of SEPA payments is no longer an option. Financial institutions must ensure their systems are set up for sending and receiving instant payments 24/7/365.
Legacy infrastructure was not meant to have zero downtimes and will need upgrades to handle real-time transactions in compliance with IPR requirements.
2. Tight Deadlines
Most of the Financial Institutions – PSPs, EMIs and PIs are in the scope of IPR. The timelines for PSPs for sending and receiving instant payments is very tight.
All aforementioned institutions must implement Verification of Payee (VoP) for all credit transfers before 9 October 2025. VoP implementation requires integration with the front-end channels as well as core banking as well which would mean co-ordination with different vendors and project stakeholders.
Institutions must not only meet the deadlines but also avoid disruption to existing services during the transition.
3. Cross-Border Integration
Instant Payments would be processed across participants from multiple Member States. Furthermore, real time payee verification would need to be conducted between 5000+ institutions which adds to the complexity of implementations.
Ensuring seamless interoperability between different applications, schemes, clearing houses, and PSPs requires well tested and advanced solutions.
4. Fraud Prevention and Compliance
The speed of instant payments reduces the window for manual intervention in case of fraudulent attempts. After all, fraudsters like it when the money moves fast.
This problem clearly needs robust automated solutions like Verification of Payee (VoP) to prevent misdirected payments and fraud.
5. Process Reengineering
Existing payment workflows, procedures and processes may require redesigning to accommodate instant processing and compliance checks.
6. Customer Communication
Customer communications would need to be sent regarding the availability and benefits of instant payment services.There will also be a need to run targeted campaigns so customers understand the risks associated with instant payments and why verification of payee results must not be ignored at the time of payment initiation.
7. Staff Training
Staff members from Front-line, customer services, retail branches as well as all lines of defense would require trained to handle instant payment operations and to assist customers effectively.
8. Cost of Implementation
The cost of upgrading legacy infrastructures, implementing new Verification of payee solution, training staff, and integrating compliance measures for sanctions check can be a challenge especially for smaller PSPs and EMIs.
Opportunities Arising from Instant Payment Regulation (IPR)
It is not all doom and gloom when it comes to Instant payment Regulation (IPR). We strongly recommend all financial insitutitions in scope for IPR to build business case looking at benefits. This approach of looking at IPR as more than a compliance tick in the box activity will bring massive business benefits and FIs with a forward looking approach are sure to benefit.
1. Excellent Customer Experience
FIs offering customers a faster and more reliable payment experience will win more customers. This will significantly boost customer satisfaction and retention leading to an overall increase in revenue.
2. Competitive Advantage
Early implementation of instant payments coupled with Verification of payee will be a good competitive advantage for FIs competing in a difficult market. There is a real chance to be seen as as a leader in innovation and customer-centric solutions.
We strongly suggest FIs to commence the journey to becoming the top of pack sooner rather than later.
3. Smart Fraud Prevention
FIs must implement Verification of Payee solution. This tools not only meet regulatory requirements but also enhance security and builds trust among users.
Customer campaigns advocating attention to verification of payee solution results can be a good line of defence against fraud.
4. New Revenue Streams
The ability to process instant payments opens up opportunities for financial institutions to offer innovative products. There is also a winning chance for FIs who have not been able to compete with bigger players in the market.
5. Becoming the Modern FI
Modernising the infrastructure can result in improved operational efficiency and scalability for future growth.
Becoming a new modern FI can lead to tremendous growth and can have a direct impact on overall profitability.
Turning Challenges into Opportunities
While the challenges of IPR implementation are undeniable, they can be overcome with the right strategy and solutions. Financial Institutions must view compliance as an opportunity for modernisation which positions them as market leaders ready to compete with peers locally and internationally.
For example, leveraging VoP solutions like TechnoXander‘s ensures accurate payee name verification, seamless integration with existing systems such as digital banking and core banking, and compliance with IPR and EPC VoP. Such tools not only mitigate risks but also empower institutions to deliver services while maintaining compliance throughout.
Stay ahead of the curve with TechnoXander’s end-to-end solutions for IPR compliance. From fraud prevention to seamless integration, our Verification of Payee (VoP) platform equips you to tackle challenges and unlock opportunities. Contact us today at vop@technoxander.com to ensure a smooth and successful transition to instant payments.
