Instant payments and open banking: what banks need to know now
The instant payments regulation is imminent and will fundamentally change payment transactions in the EU. From January 2025, banks must be able to receive instant payments. By October 2025 at the latest, they will also be obliged to enable their customers to send them. At the same time, Verification of Payee (VoP) will be added as a new security requirement. The aim is to prevent fraud by matching the recipient’s name and IBAN.
What challenges and opportunities does this present for banks – especially in combination with open banking?
What impact will the new Instant Payments Regulation have on banks?
The Instant Payments Regulation brings considerable technical and organizational requirements. Banks must adapt their systems so that they can receive and send instant payments. In addition, the recipient verification requires that the recipient’s name matches the recipient’s IBAN. This increases security and protects against fraud. Some banks have already implemented these requirements, but many still face the challenge of adapting their systems accordingly in the coming months in order to meet the regulatory requirements.
What will instant payments change for payment transactions?
Instant payments will change payment transactions considerably. They offer advantages for both private customers and companies. They are fast and convenient for consumers. Businesses benefit from better cash flow and fewer payment defaults. Banks are not allowed to charge higher fees for instant payments than for standard transfers. We therefore expect a significant increase in the use of online payments. In e-commerce in particular, they could become a real alternative to other payment methods such as credit cards.
How can banks benefit from instant payments even though they are not allowed to charge additional fees?
The increasing use of instant payments does not bring banks any additional income in the short term, but it does create long-term benefits. The fast and reliable processing of payments increases customer satisfaction. More frequent use strengthens loyalty to the bank. This is a good basis for offering additional products such as loans or investment products.
In addition, banks can use a modern payment infrastructure to make their processes more efficient and reduce costs. They are perceived as an innovative and future-proof provider. In the long term, this results in stable income, stronger customer relationships and new cross-selling potential.
How can banks combine instant payments with open banking solutions?
Banks can use finAPI’s Banking API to create a financial hub that enables their customers to integrate accounts and securities accounts from third-party banks – a concept known as multibanking. This gives customers a centralized overview of all their financial activities, and the bank becomes a “one-stop shop” for all their financial needs. Banks can use this hub to place new targeted services and personalized offers, which not only strengthens customer loyalty but also opens up new sources of revenue. An additional advantage: customers can prove their current creditworthiness more quickly by analysing their accounts – both at their own bank and at third-party banks.
Do you have an example of how banks can optimize credit checks with Open Banking?
The Digital Account Check (DAC) and KreditCheck from finAPI are examples of open banking solutions. Both products analyze income, expenses and risk factors to provide banks with a complete financial overview of all accounts – including accounts from third-party banks. The AI-based analysis constantly adapts to market changes through machine learning and thus always remains up-to-date.
Banks could also disburse loans directly via instant payment, fulfilling customers’ desire for quick and easy banking services. These solutions promote customer loyalty and increase the acceptance of open banking as they offer efficient and smooth services.
Is it possible to test the KreditCheck and the DAC in advance or use a demo?
Yes, we offer demo widgets for both solutions that can be tested freely. Special demo accounts are available for this purpose, so you do not need to use your own account.
Developers also have the opportunity to register for a test account. After registering, they will receive access data to our sandbox, where they can explore all the functions of the REST API in a secure environment. The test account is valid for 30 days and is free of charge.
Is it worth the effort to introduce instant payments and open banking solutions?
Absolutely. The implementation costs should not be underestimated, but the opportunities clearly outweigh the costs. Instant payments and open banking enable banks to stand out from the competition through innovative offerings and better data analysis. In the long term, banks will benefit from increased customer satisfaction, stronger customer loyalty and new sources of income. These investments pay off – not only financially, but also through a stronger position in the market and greater customer loyalty.
Any questions or would you like a personal consultation?
Fill out our contact form – we are happy to answer your questions!
Contact us
finAPI GmbH
Adams-Lehmann-Str. 44
80797 München
BaFin
Officially licensed and supervised by the German Federal Financial Supervisory Authority (BaFin).