How to make real-time payments across Europe

FX

Posted on 29th March 2022

Lightning fast payment rails now dominate European transactions. If you’re expanding in the continent, don’t let your business be left in the slow lane.

How to make real-time payments across Europe

Here’s something that no one has ever said: “I like being a customer of that company but I wish their payments were slower”. No matter what your business model is or what industry you’re in, everybody wants payments to be as fast as possible, both domestic and international. 

Finance has come a long way from the days when payments and banking infrastructure was a handbrake on a company’s international expansion. Two parties may be thousands of miles apart, speaking completely different languages, operating under completely different financial infrastructure and regulatory frameworks, But these days, we’ve come to expect the payment will be instant.

But this is more than a want: it’s an expectation. European customers are increasingly accustomed to payments being made and received in real-time, and this expectation will only grow. To be successful in this area real-time payments are no longer a ‘nice-to-have’, they’re a must-have. 

So if you’re a business expanding into Europe, or a European business unhappy with the speed of your payment processing, here’s our guide for unlocking real-time payments across the continent. 

SEPA Instant and Faster Payments - the lightning bolts of Europe

Real-time payments across Europe are possible thanks to two major payment rails. SEPA (Single European Payments Area) represents all 27 EU countries as well as 17 additional countries and territories (you can see a full list here). Faster Payments is the UK’s equivalent rapid payment rail. They both work in similar ways. 

SEPA connects most European banks and is a way of making real-time bank-to-bank transfers. When we say real-time, we mean it. SEPA Instant payments take up to 10 seconds, though it’s usually even faster than this. The only thing needed to make a payment is the recipient’s name and International Bank Account Number (IBAN). 

All UK banks are connected to Faster Payments, enabling bank-to-bank transfers with just the account number and sort code of the recipient. While Faster Payments asks senders to allow up to two hours for payments to be received, most transfers are completed in a matter of seconds. 

With SEPA Instant you can send a maximum of €100,000 at a time, whereas Faster Payments has recently raised its limit to £1,000,000. 

What’s the rush - why do we need fast payments? 

Aside from the fact that consumers and businesses across Europe increasingly expect payments to be instant, rapid money transfers can make a huge difference to customer experience. 

Take the example of crypto exchanges and trading platforms. With speed of payments being such a core concept of digital currencies, traders don’t want to wait days for funds to clear from their fiat bank account into their trading account. By accessing payment rails such as SEPA Instant and Faster Payments, fiat payments can be as fast as crypto, if not faster. 

The quicker your clients can send and access funds the more they can do with your business, and the more valuable your service becomes to a European customer base. 

So how do I access real-time European payments for my business?

This is where OpenPayd comes in. We connect our clients to SEPA Instant in Europe and Faster Payments in the UK, meaning we can give you access to these rapid payment rails all through a single API integration. With this plug-and-play access to payments infrastructure, we can have you set up in a matter of weeks and help make your European expansion as simple as possible. 

If you have any questions about this please don’t hesitate to get in touch. After all, in the world of payments, speed is pretty important.