The Instant Payments Regulation (IPR) is a European Union regulation that requires payment service providers (PSPs) in the euro area to offer instant credit transfers. The regulation, which came into force in 2024, ensures that payments can be made in less than 10 seconds, 24/7, across the EU.
While designed to speed up payments, IPR also places greater responsibility on financial institutions to conduct sanctions screening and AML checks without disrupting instant transaction flows. Regulators such as the European Central Bank (ECB) and the European Commission have made clear that payment providers must balance speed with robust compliance controls.
Definition Of Instant Payments Regulation (IPR)
Instant Payments Regulation (IPR) is the EU regulation mandating that banks and PSPs:
Offer instant credit transfers in euros.
Ensure settlement within 10 seconds, regardless of time or day.
Apply sanctions screening and financial crime controls in real time.
The regulation is part of the EU’s Single Euro Payments Area (SEPA) initiative to modernise payments, strengthen financial stability, and maintain compliance standards.
Why The IPR Matters For AML Compliance
The speed of instant payments increases the risk of financial crime, as funds can be transferred and moved across borders before detection.
Real-Time Sanctions Screening
The IPR requires sanctions checks to be applied to instant transfers without delay. This means firms must integrate FacctShield, Payment Screening into payment rails for immediate detection.
Customer Due Diligence (CDD)
PSPs must verify customer identities and conduct ongoing monitoring, ensuring compliance with AML directives. FacctView, Customer Screening supports accurate CDD.
Continuous Monitoring
Real-time transaction monitoring becomes more important under IPR, as suspicious behaviour must be flagged immediately. FacctGuard, Transaction Monitoring provides behaviour-based detection.
Challenges Of Instant Payments Regulation
Complying with IPR obligations is not straightforward, particularly given the demands of instant transactions.
Latency
Sanctions checks must be performed within milliseconds to avoid slowing down payments.
False Positives
Improperly calibrated screening may delay or block legitimate transactions.
Cross-Border Complexity
Payments across jurisdictions must comply with both EU rules and local AML frameworks.
Audit And Governance
Firms must maintain evidence of screening decisions, making Alert Adjudication essential for audit trails.
Best Practices For IPR Compliance
Firms can balance instant settlement with AML obligations by adopting best practices:
Automate real-time sanctions screening across all instant payment channels.
Keep sanctions and PEP lists continuously updated.
Optimise fuzzy matching thresholds to reduce false positives.
Integrate transaction monitoring with instant payment systems.
Maintain audit-ready records of screening and adjudication decisions.
The Future Of Instant Payments Regulation
The IPR represents a major shift in the EU payments landscape, and regulators are expected to expand its scope over time.
Key trends include:
Pan-European Adoption: Standardisation of instant payments across all EU PSPs.
Enhanced Sanctions Controls: Stronger requirements for list updates and real-time checks.
Integration With Fraud Controls: Linking AML screening with anti-fraud systems.
Global Influence: Other regions may adopt IPR-style frameworks, making instant payments compliance a global standard.
Strengthen Compliance With Instant Payments Regulation
The Instant Payments Regulation is reshaping the EU payments landscape. Firms must ensure they can deliver instant euro transfers while applying sanctions and AML checks in real time.
Our solutions; FacctShield, Payment Screening, FacctView, Customer Screening, and FacctGuard, Transaction Monitoring, enable PSPs and banks to comply with IPR while maintaining seamless payment experiences.
