Europe Embraces Instant Payments: Ripple Insights

An
Accelerated
Shift
to
Instant
Payments
Across
Europe

Instant
payments
are
becoming
the
transaction
method
of
choice
for
consumers
and
businesses
across
the
European
Union
and
the
United
Kingdom.
Entities
like
the
European
Commission
(EC)
are
driving
this
progress,
striving
to
build
a
more
resilient
financial
infrastructure
and
make
instant
payments
universally
available.

Payment
Services
Directive
3
(PSD3)
and
the
Payment
Services
Regulation
(PSR)

In
June
2023,
the
EC
published
proposals
for
the
Payment
Services
Directive
3
(PSD3)
and
the
Payment
Services
Regulation
(PSR)
to
keep
pace
with
the
rapid
developments
in
the
electronic
payments
market.
The
financial
data
access
and
payments
package
aims
to
sustain
an
efficient
market
for
retail
financial
services,
ensuring
the
same
rules
across
the
EU,
clear
information
on
payments,
instant
payments,
consumer
protection,
and
a
wide
choice
of
payment
services.

Challenges
with
Instant
Payments

Despite
these
advancements,
challenges
persist.
One
in
three
EU
payment
service
providers
does
not
offer
instant
euro
payments,
and
up
to
70
million
payment
accounts
in
the
euro
area
do
not
allow
holders
to
send
and
receive
instant
payments.
In
many
cases,
instant
payments
cost
much
more
than
traditional
money
transfers—often
as
much
as
€30
per
payment.

UK’s
Faster
Payments
System

In
the
UK,
the
Faster
Payments
System
enables
swift
and
secure
transactions
between
UK
bank
accounts,
24
hours
a
day.
This
system
saw
a
14%
increase
in
payments
processed
in
Q2
of
2023
compared
to
the
same
time
the
previous
year.

Highs
and
Hiccups
with
New
Payments
Systems

Pan-European
payments
collaborations
often
face
challenges,
as
seen
with
the
European
Payment
initiative
and
the
more
recent
P27
initiative.
Conflicting
interests
and
misalignment
among
coalitions,
plus
a
lack
of
critical
mass
participants,
are
problematic.

Trends
Supporting
Instant
Payments

A
few
key
trends
are
supporting
the
accelerated
adoption
of
instant
payment
methods
across
Europe.
The
European
Central
Bank
is
exploring
a
digital
euro
that
would
offer
a
pan-European
payment
solution
under
European
governance.
Financial
institutions
will
need
to
move
quickly
to
onboard
and
implement
institutional-grade
digital
asset
software
infrastructure
to
keep
up
with
demand
and
offer
digital
euro
services
to
their
customers.

Image
source:
Shutterstock

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