Swift: 44% of European SMEs Believe Instant Payments Regulation Will Save Them Money

Small and medium enterprises (SMEs) across the European Union are optimistic about the EU’s Instant Payments Regulation, anticipating cost savings, improved cash flow, and enhanced competitiveness, according to new research by financial messaging network Swift.

Swift surveyed over 2,000 decision-makers at SMEs in France, Germany, Italy, and Spain who conduct cross-border transactions within the EU, gathering their opinions on the Instant Payments Regulation, which took effect in April.

Nearly 90% expect to be affected by the change, with 44% believing it will save their business money and 27% expecting improved cash flow. Additionally, one in five predict increased competitiveness.

The EU’s Instant Payments Regulation mandates the Verification of Payee (VoP) for cross-border payments within the Single European Payment Area (SEPA) by October 2025. Eighty-three percent of respondents indicated that upfront beneficiary checks are important, highlighting a major reason for their positive reception of the new regulations.

In response, Swift aims to simplify compliance for financial institutions by facilitating the interoperability of VoP schemes through its payment pre-validation solution. This solution ensures the secure transmission of standardized financial data, which is crucial for the success of VoP as a friction-reducing tool, and supports the widespread use of VoP in cross-border payments. It enables financial institutions to comply with the regulation quickly using their existing Swift connectivity.

Two VoP providers, CBI and SurePay, have already expanded their reach across Europe and beyond through collaboration with Swift.

Currently, instant credit transfers across Europe account for less than 13% of the total. The Instant Payments Regulation aims to enhance the European cross-border payments ecosystem, building on the European Payments Council’s One-Leg-Out Instant Credit Transfer scheme introduced in November. Swift connects domestic instant payment systems within and outside of Europe, providing transparency and end-to-end tracking.

Marianne Demarchi, Chief Executive of EMEA at Swift, stated, “The European regulation has the potential to be a landmark development for the cross-border payments industry, but financial institutions are under pressure to comply with the Verification of Payee element by the October 2025 deadline. Swift is ideally placed at the heart of the industry to facilitate interoperability of VoP schemes, simplifying the compliance process for our community and giving users of cross-border payments peace of mind when sending money not just across borders within Europe, but also beyond.”

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Swift also shared feedback from respondents who noted the regulation would save them time, increase efficiency, and incentivize working with international suppliers by simplifying payment management and reducing expenses. One respondent emphasized that immediate handling of invoices is crucial to avoid late payments.

Source: thefintechtimes.com