Regulation Spotlight
EU instant payments regulation (IPR)
Understand how the EU’s Instant Payments Regulation brings 24/7, real-time euro credit transfers into everyday banking, and how the LEI supports secure, transparent counter-party identification across instant payment flows.
Overview
The EU Instant Payments Regulation (commonly “IPR”) amends the SEPA Regulation and associated EU payment frameworks to mandate that payment service providers in the euro area offer instant credit transfers with parity in cost and availability to conventional transfers. The regulation entered into force in April 2024.Objectives and scope
- Ensure that all payment service providers (PSPs) sending or receiving euro credit transfers offer the ability to receive instant credit transfers by 9 January 2025 and the ability to send instant transfers by 9 October 2025 (for euro-area PSPs) under the SEPA scheme.
- Require that charges for instant credit transfers are no higher than for regular credit transfers of the same type.
- Mandate verification of the payee (verification of payee service) free of charge for both instant and non-instant transfers.
- Expand reach of instant credit transfers across borders within the EU/EEA and encourage full adoption of real-time payments by all PSPs.
Why organisation identity matters
As payments accelerate into the instant domain, the need to ensure correct identification of all parties remains critical for fraud prevention, compliance with sanctions and anti-money laundering, operational reconciliation and liquidity risk management. A globally-unique identifier such as the LEI provides the single, consistent entity reference across systems and jurisdictions. This matters because in real-time payments there is little time for manual checks, and mismatches in entity names or identifiers can cause rejections, holds or compliance breaches. The IPR’s requirement to verify payee identity particularly underscores the need for an authoritative entity identifier.
While the IPR itself does not explicitly mandate LEIs in all instant payment messages, the regulation opens the door for enriched data usage and enhanced counterparty transparency in the payments ecosystem making the LEI a natural fit for firms looking ahead. For example:
- In a 10-second transfer window, having the creditor and debtor both identified by LEI means automated systems can quickly verify entity status, match to screening lists and trigger reconciliation.
- For corporates operating cross-border in the euro area, LEIs help harmonise identification across local PSPs, different country regimes and pan-European payment flows aligning with IPR’s interoperability goals.
- Financial institutions upgrading infrastructure to support IPR must ensure their entity-reference frameworks (including LEI capture and validation) are embedded, to avoid disjointed data flows and manual overrides.
Implementation insight
To align with EU instant payments regulation (IPR):
Identify flows
PSPs should assess payment flows, particularly those involving legal entity senders or beneficiaries, to ensure their entity-identifier steps include LEI capture, verification and renewal.
LEI capture
Onboarding and payments platforms need to integrate LEI-lookup (eg via the GLEIF API) to confirm validity and status before enabling instant transfers.
Fee modelling
Firms should review fee structures: since IPR prohibits higher fees for instant transfers, cost-modelling should assume full adoption; entity-identification systems must scale accordingly.
LEI verification
Because IPR requires payee-verification services (free of charge), banks and PSPs can leverage entity identifiers (including LEIs) to automate the “name-check” element of verification without expensive manual intervention.
Payee checks
For corporates, if they send or receive euro instant transfers, embedding the LEI into outbound payment instructions and ensuring counterparties can process LEIs contributes to smoother settlement, reduced exceptions and future-proofing as richer data regimes evolve.
RapidLEI support and next steps
RapidLEI offers a streamlined registration and management service for LEIs. The solution is ideal for corporates and PSPs preparing for IPR-driven instant-payment flows.
- Register your legal entities now to embed the LEI into your instant payment systems, enabling faster onboarding and payments processing.
- Use RapidLEI’s renewal management to ensure your LEIs remain active and valid, a critical responsibility for real-time payments where expired identifiers can cause rejects or holds.
- Integrate RapidLEI’s API into your payment-initiating systems so entity identification becomes an intrinsic part of your instant-payment readiness.
