instant payments
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Swift: 44% of European SMEs Believe Instant Payments Regulation Will Save Them Money

Small and medium enterprises (SMEs) across the European Union currently feel positive about the EU’s Instant Payments Regulation, with many expecting it to save them money, improve cashless, as well as their competitiveness; according to new research by financial messaging network Swift

Swift surveyed over 2,000 decision-makers at SMEs based in France, Germany, Italy and Spain, who already transact cross-border within the EU, about their views on the Instant Payments regulation, which came into force in April.

Almost nine in 10 expect to be impacted by the change, 44 per cent of respondents say the regulation will save their business money, and 27 per cent think it will help improve their cashflow. One in five expect to be more competitive.

The EU’s Instant Payments Regulation mandates the Verification of Payee (VoP) for cross-border payments within the Single European Payment Area (SEPA) by October 2025. Eighty-three per cent of respondents explained that upfront beneficiary checks are important to them, signalling one major reason many are happy with the new regulations.

Recognising this, Swift aims to make it simpler for financial institutions to comply with the regulation, by facilitating interoperability of VoP schemes through its payment pre-validation solution.

It explained this solution ensures the secure transmission of standardised financial data – which is critical to the success of VoP as a friction-removing tool – and paves the way for its widespread use in cross-border payments while enabling financial institutions to comply with the regulation at pace using their existing Swift connectivity.

Two VoP providers have already expanded their reach across Europe, and beyond, through collaboration with Swift – CBI and SurePay.

Bolstering EU instant payments

Instant credit transfers across Europe currently account for less than 13 per cent of the total. The Instant Payments Regulation aims to improve the European cross-border payments ecosystem, following on from the introduction of the European Payments Council’s One-Leg-Out Instant Credit Transfer scheme in November, for which Swift connects domestic instant payment systems within and outside of Europe, providing transparency and end-to-end tracking.

Marianne Demarchi, chief executive, EMEA, at Swift, talks Instant Payments regulation
Marianne Demarchi, chief executive of EMEA at Swift

Marianne Demarchi, chief executive (EMEA) at Swift, said: “The European regulation has the potential to be a landmark development for the cross-border payments industry, but financial institutions are under pressure to comply with the Verification of Payee element by the October 2025 deadline.

“Swift is ideally placed at the heart of the industry to facilitate interoperability of VoP schemes, simplifying the compliance process for our community and giving users of cross-border payments peace of mind when sending money not just across borders within Europe, but also beyond.”

Swift also revealed that one respondent explained the regulation would save them time and become ‘more efficient’, while another believes it is ‘a great incentive to work with suppliers from abroad’ as it makes it easier to manage payments and reduce expenses.

Meanwhile, another respondent said that if invoices aren’t dealt with immediately upon arrival, ‘it can quickly lead to late payments’.

Author

  • Tom joined The Fintech Times in 2022 as part of the operations team; later joining the editorial team as a journalist.

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