Impact of Instant Payments in the EU
Blog post from Basis Theory
European instant-payment rules required banks to receive instant transfers in early 2025 and, from October 2025, to send them around the clock, accelerating a shift already reflected in rising transaction volumes in systems such as the UK’s Faster Payments network. While consumers and merchants benefit from faster access to funds, improved cash flow, simpler reconciliation, and restrictions on extra instant-payment fees, banks face substantial infrastructure, liquidity-management, and profitability challenges because transfer delays and associated “float” income are eliminated. The irreversibility of instant payments also heightens fraud risks, prompting requirements for IBAN matching and increased use of AI and machine-learning tools, including behavioral monitoring, dynamic transaction scoring, and fraud checks across banks, gateways, and devices. Merchants are encouraged to reduce payment friction and manage failed transfers effectively, while balancing the security and compliance risks of storing customer data; programmable payment vaults are presented as one option for securely tokenizing payment information and connecting merchants with multiple payment providers.
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