Thursday, July 25, 2024

EU SMEs positive on instant payments regulation, Swift says

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Swift has released research findings indicating positive sentiment among SMEs in the European Union towards the EU’s Instant Payments Regulation.


The regulation, effective since April, has gathered optimism among SME decision-makers in France, Germany, Italy, and Spain who engage in cross-border transactions within the EU. Key insights from the survey of over 2,000 SME decision-makers revealed that nearly nine out of ten expect to be impacted by the regulation. Specifically, 44% anticipate cost savings for their businesses, while 27% foresee improvements in cashflow, and 20% believe it will enhance their competitiveness. 

A notable aspect highlighted by 83% of respondents is the importance of upfront beneficiary checks. Mandated by the regulation for cross-border payments within the Single European Payment Area (SEPA) by October 2025, Verification of Payee (VoP) aims to standardise this process across countries where domestic VoP schemes already exist. 

Swift aims to facilitate compliance with VoP through its Payment Pre-validation solution, which ensures secure transmission of financial data and supports interoperability of VoP schemes. This initiative is expected to streamline cross-border payments and assist financial institutions in meeting regulatory requirements using existing Swift connectivity.



VoP providers working with Swift

VoP providers such as CBI and SurePay have expanded their services across Europe through collaboration with Swift, further supporting the regulation’s implementation. In the company press release, representatives from Swift underscored the regulation’s potential impact on the payments industry, emphasising Swift’s role in simplifying VoP scheme interoperability and compliance for financial institutions. 

The regulation’s introduction follows other initiatives aimed at enhancing the European cross-border payments landscape, including the European Payments Council’s One-Leg-Out Instant Credit Transfer scheme (OCT Inst), which Swift connects to domestic instant payment systems within and outside of Europe for improved transparency and tracking capabilities.

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