Travelling Companions: Treasury’s Journey towards Instant Payments

While instant payments (IP) usage has increased in recent years (according to the European Central Bank’s annual report from December 2024, the daily number of IP transactions has increased by 72% in 2024 compared with 2023), the ability to make rapid fund transfers has mostly been adopted in the retail/B2C space, notes Fischer. The lower uptake by corporate treasurers, is, she notes, largely as a result of most still feeling uncertain about the use cases and value propositions of IP.

In a B2C environment, the offer of IP – which according to SEPA Instant Credit Transfer (SCT Inst) rules must be settled within 10 seconds and be available 24/7 – presents a clear advantage to firms, observes Fischer. One reason is that it helps increase customer satisfaction, for example where refunds are issued and made available to the customer in near real-time.

In the B2B space, however, IP does not necessarily sit well with the day’s treasury activities which are typically well-structured and organised. Many treasury tasks are geared towards meeting the cut-off times imposed by interbank liquidity management systems that still experience daily end-of-business periods, weekends, and annual closure days. 

For treasurers, these cut-offs effectively close the day for the company. This marks a clear cash position and liquidity boundary, on which the posting of their overnight cash deposits, for which they may earn interest, may be based. However, with IP potentially being executed and received at any time, the broad-based adoption of IP by treasury into B2B will turn this long-standing and well-rehearsed structure on its head. 

While the traditional approach enables a treasurer to execute payments according to a schedule, then build a picture of its end-of-day cash position, and leverage overnight deposits with banks whenever possible, Fischer believes that IP “can help them move a step further”. This could be especially beneficial for rapidly resolving payment issues, or accelerating cash position updates. It could, one day, even see intraday interest paid (possibly hourly) on bank deposits. That same frequency could equally be applied to interest rate recalculations on overdrafts, for example. 

This is conjecture, of course, and Fischer accepts that when IP becomes the norm, and both bank and treasury systems will be aligned with real-time thinking, then treasury’s level of control over its end-of-day cash positions could diminish. 

Everyone is still learning

In order that critical mass of IP usage is reached, it requires a balance to be found between traditional and real-time mechanisms. The challenge here, notes Fischer, is that the mechanisms required to handle 24/7 flows in treasury are simply not ready. Indeed, she comments, the “creation of the treasury of tomorrow” raises many questions that are still seeking answers, for both bank and corporate client alike.  

To address these challenges, it is essential to advance core treasury technologies, such as the Treasury Management Systems and payment processes, that have until now been steered by traditional cut-off times.

However, progress towards greater IP take-up also requires a more concerted educational effort by those that seek to promote its use, such as the European Banking Authority (EBA). Regulatory responses, particularly in Europe, have been decisive. The roll-out of the EU’s Instant Payments Regulation (IPR), which came into force in 2024, mandates that all banks and payment service providers (PSPs) in the Eurozone support SEPA instant credit transfers (SCT Inst) for incoming payments since January 2025, and for outgoing payments by October 2025. Furthermore, part of the IPR’s push to accelerate the adoption of SCT Inst acknowledges the fraud concerns of users.    

Indeed, a major concern around IP for treasurers in particular is its increased potential for fraud. The EBA has indicated that instant transfers are around 9 times more likely to be fraudulent than standard credit transfers. The immediacy of IP and the emergence of new threats such as authorised push payment (APP) fraud (where the victim initiates the transfer themselves having fallen for devious manipulation techniques such as phishing), have called into question the wisdom of adopting IP in some instances, particularly in treasury. 

The technical solution is the introduction of real-time fraud monitoring and stronger third party validation. Key among these is Verification of Payee (VoP), a feature that seeks to verify a match between the IBAN and the beneficiary’s name for both instant and standard SEPA transfers. The scheme provides the essential technical framework to facilitate interoperability between PSPs so that all requests to verify a name-IBAN combination, and subsequent responses, can be exchanged across different systems.

VoP arrives as the current €100,000 SCT Inst cap is due to be removed in October 2025. However, most banks will propose to their corporate clients to set their own limits, according to their operational capacity and risk appetite.

IP in the real world of treasury

While B2C clients have clearly grasped the nettle, and many are now fully leveraging IP, the B2B space remains uncertain as to the best way forward, observes Fischer. The IP waters were somewhat muddied by the harmonisation that SEPA brought to the industry a few years ago. “SEPA credit transfers are already very efficient, often with payments executed within one hour,” she notes. “It’s another reason why a company really needs to identify the added values and use case of IP.”  

While this may suggest that for many corporates IP remains off the table, this really is not the case, stresses Fischer. “I’ve not spoken to one company for whom IP is not for them. They have all been thinking about how they can benefit from it.”
And indeed, there are already some strong B2B use case contenders. In the M&A process, for example, Fischer notes that a series of payments can sometimes be required to meet a deadline. But if delays are created by legal process, for example, a useful addition such as IP suddenly becomes an essential one because failure of an M&A deal can be extremely costly. 

The speed and irrevocability of IP could also become criteria for selection for some corporates when issuing their commercial offers, she continues, as IP can become a differentiating factor. However, she accepts that IP will not always be a game-changer, and for the many companies that currently view IP positively, finding a suitable everyday outlet for them depends on the nature of their business and on the information and support offered by their banks.

Co-creating a new world of payments

“This is an active and ongoing process for us; we have a deep dive underway with a number of our clients as we seek to identify innovative solutions for the treasury of tomorrow,” Fischer reveals. A key part of these frequent, two-hour interactive usually 20-strong client sessions, is devoted to finding new use cases for instant payments.

“We discuss the impact of IP on treasury, and we try to address all of their questions,” she explains. “At a high level, clients need to know about the degree of internal reorganisation it requires, in terms of systems, infrastructure, data management, and processes, and the changes that will be required at the bank end too.” 

But she adds that the sessions also cover clients’ everyday practical challenges related to IP, such as how they can manage out-of-hours payments and maintain accurate cash positions. They also examine how they can ensure they have adequate liquidity or credit lines with their banking partners and the measures they can take to continue optimising their deposit allocations. Topics also, of course, include updates on the latest in fraud and cyber detection and prevention, including VoP and how clients can manage payment rejections.

“During these sessions, sometimes there are more questions than answers, particularly at an early stage,” admits Fischer. “But once we’re underway, we can work with clients to identify new use cases and opportunities, with some clients requesting additional workshops to help them understand an even fuller scope of IP possibilities and requirements, so that once they switch, they can make the most of it.”

Towards new frontiers

As IP progresses, Fischer says awareness needs to be built in particular around the One-Leg Out (OLO) Instant Credit Transfer (OCT Inst) scheme. This is an EPC  payment initiative enabling incoming and outgoing international instant credit transfers. It uses the automated funds transfer systems available in the euro-leg and, where possible, similar systems in the respective non-euro-leg countries. This is expected to offer users cross-border payments execution with all the advantages of IP, and could mark a significant development in corporate treasury interest in the IP movement.

But there is even more to come in this space, states Fischer. “We think that IP could be a door opener to AI because everything is live. That opens up the possibility for real-time treasury payments analysis, which in turn could facilitate the adoption of AI-based reconciliation reporting and cash forecasting.”

All it requires is for more banks and their corporate treasury clients to open up to the discussion, understand how IP can help, and then start building many more use cases. “It will take time,” Fischer acknowledges. “But at Societe Generale, we are ready to accompany our clients on this journey.”

By Emmanuelle Fischer, Head of Payments and Cash Management, Societe Generale