Fiserv and EU Instant Payments: A New Era for European Banks

The European Union's Instant Payments Regulation is set to reshape the financial landscape.

As of 9 October,  payment service providers within the Single Euro Payments Area (SEPA) are required to have the capabilities in place to send instant payments having been required to accept them since January.

This regulation mandates that immediate transfers are priced the same as traditional slower credit transfers and banks will be required to offer a ‘Verification of Payee’ service to combat fraud.

Non-EU financial institutions in the European Economic Area have until 2027 to comply, whereas areas such as the UK, which is in SEPA but outside the EU and EEA – face no set deadline. 

Operational and competitive pressures of SEPA compliance are likely to impact them nonetheless.

Beyond compliance: A competitive necessity

For forward-thinking financial institutions the new regulation is more than a mere compliance exercise.

Rossana Thomas, Vice President and Head of Payment Solutions at Fiserv, comments on how financial institutions can thrive in a post-SEPA instant payments landscape: “Regulation and standards should be treated as more than a compliance box-tick – they provide the foundations for service levels that all providers should aim to function at, whether they are compulsory or not.”

Rossana continues:  “Regardless of location PSPs with multinational customers will be at a competitive disadvantage if they disregard SEPA instant payments.

Modernising for a real-time world

The shift to instant payments necessitates a move away from legacy systems.

“PSPs that thrive will be the ones that prioritise regulatory compliance while updating legacy systems including cloud migration and real-time fraud monitoring tools” explains Rossana.

The move to real-time payments renders traditional fraud prevention methods obsolete.

Rossana suggests that “banks ought to consider adopting adaptive machine models that adjust to new fraud patterns. These models differentiate genuine transactions from abnormal ones by analysing contextual signals like location device and transaction history rather than static parameters.”

The future is customer-centric

The regulation also signals a fundamental shift in focus from the transaction itself to the broader customer experience.

“This new regulation calls for a shift in focus – from the transaction itself to the wider customer experience. As a result PSPs must strive to future-proof their solution” says Rossana.

She advises this can be done through a centralised global payment hub that streamlines processes to handle a range of transactions and integrates existing applications – such as account processing and anti-money laundering – with new payment initiatives catering to the customer’s varying needs.

“Such a hub helps financial institutions fulfill the demand for secure and flexible real-time payments both domestically and internationally” she adds.

As instant payments become the new standard it is clear that participation is not just an option but a necessity for survival and growth in the evolving world of finance.

Rossana concludes: “As 24/7 instant payments increasingly become standard practice it is essential for all PSPs to participate if they are to thrive.”

Fiserv showcasing innovation 

Fiserv was recently named fifth in the Top 100 Fintech Companies published by FinTech Magazine. 

The list exhibits fintech companies that are providing essential innovation and quality to millions of customers. 

Fiserv displays itself as one of the key players in the fintech space, providing valuable financial services to clients in more than 100 countries. 

FinTech Magazine's ranking highlights some of the organisations setting the benchmark for excellence across the industry.