SEPA Instant: What is it and how does it help travel businesses?

Apr 27, 2022

SEPA Instant, a new bank transfer technology enabling lightning euro transactions.

An instant payment is simply an electronic payment processed in real time or almost real time. Today, consumers and businesses alike expect ever easier and faster payment services.

For B2B payments, issues with delays can be exacerbated with extra fees, and in the travel world the payment ecosystem can be extremely complicated. Several countries recognised the need for a payment solution, including the UK, Germany, and Norway, but schemes at a national level are limited in their implementation by borders. The need was clear for a mechanism for a pan-european instant payment scheme.

SEPA Instant was created. Businesses could make payments in Euros internationally with the same ease as in their home country.

What is SEPA Instant?

A mechanism enabling near instant payments for participants.

It is a bank transfer technology that, regardless of time or day, allows Euro transactions to be processed in seconds. Providing both participants in the transfer are European payments institutions, and are participants in SEPA Instant, the transfer should be instant (within 10 seconds).

Where this is different from previous mechanisms is that the speed of the transfer is not affected by your account providers clearing and settlement arrangements. As long as both are participants of the scheme then the transfer will be instantaneous.

How open banking helps digitise payments

Traditional banking could never meet the speed of processing that schemes like SEPA Instant now enable. Open banking has been a large part of how this can be achieved.

Rather than processing transfers in batches which is how banks would have traditionally managed, open banking allows the PSP (Payment Service Provider) to recognize the transaction as SEPA Instant and therefore process in real-time on a transaction level.

What are the benefits of SEPA Instant?

Firstly, speed. Whereas most transfers can take up to 3 days to arrive, with SEPA Instant payments can be made in real-time. Only 10 seconds are needed to see the money on one’s account.

Availability. The transfer of money is immediate and available 24/7/365.

The ability to instantly transfer, and the 24/7 availability of funds can help improve businesses cash flow, reducing the cost of managing cash and cheques.

How can travel businesses use SEPA Instant?

As a business there are no steps to take to utilise SEPA Instant, when you are making transfers providing both participants in the transfer are European payments institutions, and are participants in SEPA Instant then the scheme is utilised.

Alternatives to bank transfers

Businesses need choice, particularly when it comes to travel B2B payments, where travel agents, OTA’s, or others operating in the travel sector are dealing with multiple suppliers such as airlines, hotels, or even advertising costs from Google or facebook.

Bank transfers are one method, with SEPA Instant enabling real time payments, and with Pax2pay you can also use the UK Faster Payments mechanism.

Our full digital payment solution gives you the choice of virtual cards or bank transfers. This gives you and your suppliers flexibility.

Virtual cards offer an alternative to bank transfers, with many innovative features that create a safer, more convenient, and more controlled payment experience. They reduce risk, are highly secure, and can boost revenue with attractive rebates.

With Pax2pay, you can utilise all the advantages of virtual cards with the flexibility of our all-in-one payment solution.