EPC goes live with its OCT Inst cross-currency payment scheme

The launch marks a step forward for the EPC as it extends its operations beyond the Single Euro Payments Area (SEPA) for the first time. The OCT Inst scheme facilitates cross-currency payment transactions, supporting the seamless processing of both incoming and outgoing international instant account-to-account credit transfers. Notably, it exclusively covers the Euro Leg of international instant credit transfers that enter or exit the geographical scope of SEPA. 

The scheme aims to bring the advantages of SEPA payment schemes to the field of international payments. It aligns with the European Commission’s Retail Payments Strategy, focusing on improving the international role of the euro, and aligns with G20 objectives concerning international payments. 

The OCT Inst scheme, developed through a community-driven approach, allows Payment Service Providers (PSPs) managing the Euro Leg to utilise existing SEPA payment infrastructure, including established procedures, standards, and agreements with clearing and settlement mechanisms (CSMs). This incorporates elements from familiar schemes such as the SEPA Instant Credit Transfer (SCT Inst).

A closer look at the OCT Inst scheme

Under the OCT Inst scheme, PSPs within SEPA can efficiently process incoming and outgoing international credit transfers using automated funds transfer systems available in the Euro Leg. This also extends to similar systems in non-Euro-leg countries or jurisdictions. This enables PSPs to offer international payments to customers, capitalising on the instant execution, cost-effectiveness, and broad reachability inherent in SEPA, while ensuring the transparency and traceability required for international transactions. 

The OCT Inst scheme will undergo a transparent change management cycle, consistent with other EPC payment schemes. Stakeholders are invited to submit change requests for the OCT Inst scheme rulebook until 31 December 2023. 

In the official press release, representatives from the EPC highlighted the OCT Inst scheme as the EPC's inaugural non-SEPA initiative, targeting international account-to-account payment transactions. Leveraging the extensive base of European PSPs supporting the SCT Inst scheme, the OCT Inst aims to add transparency and traceability mandated by the G20 and the Financial Stability Board. The EPC views this new scheme as timely, with the potential to reshape the landscape of international instant payments through a multilateral approach.