Europe’s shift to instant payments is redefining how money moves, how customers judge service, and how businesses manage liquidity. Simona Moosar explores how real-time settlement, regulatory mandates, and maturing infrastructure are reshaping profitability, risk management, and customer expectations across the European payments landscape.
Europe is moving toward a financial environment where money moves with the same immediacy as information. This shift is not driven by consumer habits alone. It is being shaped by firm regulatory decisions and the growing maturity of payment infrastructure across the European Union. Regulation (EU) 2024/886 requires any provider that already offers euro credit transfers to support instant credit transfers as well. The payment must reach the recipient within roughly ten seconds, at any time of day, and without higher pricing than a standard credit transfer. These obligations turn real-time settlement into a basic requirement for participation in the European payments market.
The SEPA Instant Credit Transfer scheme provides the technical foundation for this transformation. It guarantees near-instant movement of funds within the SEPA area and has been adopted by a growing majority of European banks and payment institutions. PSD2 created the regulatory space for third-party initiation of account-to-account payments. PSD3 and the accompanying Payment Services Regulation now seek to standardise access, strengthen fraud controls and reduce friction between banks and non-bank providers. The result is a more coherent environment for real-time payments, even as adoption levels differ widely. Markets in Northern and Eastern Europe often treat instant transfers as routine, while others are still updating their core banking systems and operational processes.
The pressure to adapt is particularly strong in sectors where the value of a service depends on immediate confirmation of payment. For instance, mobility and parking operators need to verify a transfer before activating access, while e-commerce companies use instant settlement to ship goods more quickly and reduce customer uncertainty. Platforms that handle large payout volumes can also benefit from incoming flows that refresh their balances throughout the day. The challenge for many merchants, then, is not willingness but readiness. Treasury, reconciliation, customer communication, and fraud processes were designed for slower payment systems. When settlement becomes immediate, the surrounding architecture must adjust as well.
As Europe enters this new phase, instant payments will begin to resemble card authorisations in the minds of both businesses and consumers: an assumed feature that is always available and central to the experience.
Profitability in motion: How instant payments reshape European merchant economics
The most visible difference between traditional card flows and instant account-to-account payments is speed. The more important difference is what that speed does to merchant economics. Traditional settlement cycles can take several days, which ties up working capital and increases reliance on credit. Instant payments remove this delay. A completed sale becomes available cash almost immediately, which improves the company’s liquidity position and shortens the time between revenue recognition and usable funds.
Businesses that depend on quick payouts can fund these flows from balances that refresh throughout the day, rather than from separate credit lines that bridge settlement gaps. The earliest changes appear in the timing of cash conversion, internal payout objectives, and the volume of short-term financing the business needs. Faster settlement reduces the need for buffers that existed only to cover delays in receiving funds.
Instant transfers also influence risk and operational cost. They do not involve traditional card chargebacks and benefit from mandatory name and IBAN checks, which reduce the number of misdirected payments. Although fraud and disputes still require solid controls, the nature of the risk becomes more predictable. The reduction of some authorised push payment fraud risk strengthens confidence in account-to-account methods. In high-volume environments, even modest improvements in settlement accuracy and timing support better margins.
Over time, the choice becomes less about whether instant payments save money and more about how much slower settlement cycles cost. European merchants that depend on speed, liquidity and tight cash cycles will be the earliest to feel the difference.
The real-time consumer: Evolving expectations across Europe’s digital landscape
Consumers care less about payment mechanics and more about whether a service activates when they expect it to. Instant payments allow businesses to confirm orders, open access and deliver digital content without delay. This immediacy affects trust. A rapid transition from payment to confirmation reassures customers that the transaction is complete and reduces the anxiety that often accompanies larger purchases or cross-border transactions.
Fast refunds and withdrawals also shape perception. A customer who receives money back within seconds feels that the brand is fair and accountable. This can lead to higher retention and more frequent use, particularly in industries where customers move funds in and out often.
Security perception remains a nuanced topic. Cards are familiar and have well-known consumer protections. Account-to-account payments feel newer, yet they are supported by strong customer authentication and mandatory verification rules that reduce misdirected transfers. As these protections continue to mature, the line between perceived card security and perceived instant payment security becomes less distinct.
Consumer expectations move quickly once a new standard is introduced. As instant payments become more common across Europe, customers will expect immediacy not only at checkout but throughout the entire commercial relationship.
Preparing for a real-time Europe: Infrastructure, risk, and the road to full adoption
Most merchants do not build their own payment infrastructure. They depend on providers that can support real-time settlement across multiple European markets. To succeed in this landscape, companies need partners with reliable access to local payment rails, coverage of local currencies, and the ability to settle funds without unnecessary conversions. This reduces friction and improves margin predictability.
Routing also becomes a strategic function. Acceptance rates, transaction costs, and regional payment preferences vary widely. A provider that can evaluate these conditions and route payments accordingly gives merchants a clear financial advantage. Merchants should understand whether their provider holds client funds under the appropriate license or acts purely as a technical intermediary. This distinction determines how settlement, safeguarding, and reconciliation are handled.
Fraud and AML processes require particular attention. Instant settlement leaves very little time for intervention, yet efficient controls are possible. The Instant Payments Regulation allows sanctions screening to occur on a daily basis rather than on every individual transaction. Behaviour-based monitoring remains essential for identifying suspicious activity in real time.
Open Banking continues to strengthen the foundation for instant account-to-account payments. It enables direct initiation from customer bank accounts and will become more powerful as Europe advances toward Open Finance. The proposed Financial Data Access framework and the SEPA Payment Account Access plan introduce the possibility of combining payment initiation with richer financial data, which allows for more flexible billing, subscription and credit models.
Over the next few years, three developments will shape the landscape: the full implementation of mandatory instant payments in euro, the refinement of PSD3 and the Payment Services Regulation, and the growing regulatory clarity around digital assets under MiCA. The evolution of Variable Recurring Payments in the United Kingdom provides a preview of what recurring, API-based payment models can achieve, and European providers are exploring similar innovations within their own regulatory boundaries.
Real-time payments have moved from novelty to expectation. They influence liquidity, customer experience and operational resilience. Companies that understand these dynamics early will be able to redesign their business models around continuous cash flow and faster value delivery. In short, Europe’s shift to real-time settlement is reshaping the financial foundations on which businesses operate. Liquidity moves differently, risk is structured differently, and competitive advantage emerges in new places. Companies that adapt early will be positioned to lead in this new environment.
About the Author
Simona Moosar is the Chief Revenue Officer at Noda. She brings extensive experience in fintech, European payment systems, card acquiring, alternative payment methods, and Open Banking. In her current role, she oversees revenue, strategy, commercial and margin management, and global partnerships.
