The EU Instant Payments Regulation: what it means for compliance in 2025

Money in Europe is now moving faster than ever. The EU’s Instant Payments Regulation (IPR), which entered into force in April 2024, mandates that PSPs in euro-area countries must be able to receive euro instant payments (i.e. settled within 10 seconds) by 9 January 2025, and send them by 9 October 2025.

The goal of this new regulation is to provide consumers and businesses across the European Union with 24/7 access to instant and secure payments, while strengthening Europe’s competitiveness in the global financial market. 

For customers, the benefits are immediate. But for financial institutions, the new regulation has also introduced a host of operational and compliance challenges, particularly when it comes to preventing financial crime at speed.

In this article, we’ll explore what the IPR requires, the compliance challenges it creates, and how financial institutions can adapt.

What the EU Instant Payments Regulation requires

The IPR was introduced in March 2024 as an amendment to the Single Euro Payments Area (SEPA) Regulation. The key points are:

1. Reachability and speed

Instant transfers must be available round-the-clock, with the payee’s PSP making funds available and confirming completion within 10 seconds.

2. Verification of Payee (VoP)

Before authorising a payment, PSPs must offer a check that compares the account details (e.g. IBAN) with the payee’s name and alert the payer if they don’t match. The payer can still proceed, but must see the warning. This applies to all euro credit transfers, with euro-area PSPs required to comply by 9 October 2025.

3. Sanctions compliance for instant payments

Instead of transaction-time screening, which could delay instant transfers, PSPs must screen their customers at least daily and immediately after any change to EU-targeted financial restrictive measures. Per-transaction screening during the execution of an instant transfer is not performed under the IPR. Other AML/CFT obligations still apply.

Why the IPR creates compliance challenges

The shift to instant payments presents unique challenges for financial institutions in terms of sanctions compliance. With instant payments, there’s little room for manual checks or delays. Screening must be both fast and accurate.

In addition, EU sanctions lists can change daily, sometimes multiple times in a single day. If firms only screen against lists once a day, they risk processing payments with newly sanctioned entities. Without automated solutions, compliance teams may be required to re-screen entire customer bases multiple times a day.

In short, instant payments require instant compliance.

How financial institutions can prepare

To meet these demands, it's not enough for banks and PSPs to simply upgrade their payment systems. They also need to upgrade their compliance infrastructure to ensure that it is both reliable and real-time ready. 

Key steps include:

• Automate list changes and customer screening for EU-targeted financial restrictive measures, and maintain robust AML/CFT monitoring alongside.
• Embed low-latency controls directly in payment flows to meet the 10-second requirement without false blocks.
• Implement VoP correctly (including pre-authorisation checks, disclosure of mismatches/close matches, and option handling for legal-person identifiers).
• Evidence everything (time-stamped logs of screenings, VoP responses, confirmations) to demonstrate controls operated before execution where required. 

Staying ahead with near real-time sanctions data

A significant compliance challenge under the IPR is the need for near real-time sanctions updates. Traditional list updates no longer meet regulatory expectations.

To stay ahead, financial institutions need access to reliable and constantly updated data sources.

Trapets’ Instant EU Sanctions List, delivered by ION Analytics, was built specifically for this challenge. Updated every 30 minutes directly from the EU’s Official Journal, it ensures financial institutions are screening against the most current sanctions data available.

With this data source, banks, PSPs, and other regulated entities can:

• Detect sanctions changes as they happen.
• Screen payments, onboarding and monitoring workflows in real time.
• Reduce compliance risk and avoid costly delays.
• Meet the requirements of SEPA Instant and the broader Instant Payments Regulation.

Get in touch with our team today to learn how Trapets Instant EU Sanctions List can support your compliance workflows.