The time to act on OCT Inst is now – here’s why

 

Annick Moes, Euro Banking Association: By leveraging existing building blocks, OCT Inst unlocks a pan-European opportunity to enhance cross-border payments in line with the G20 Roadmap targets. 

Enhancing cross-border payments has become a global priority, crystallised in the G20 Roadmap launched in 2020 by the Financial Stability Board (FSB) and the Committee on Payments and Market Infrastructures (CPMI). This roadmap sets ambitious 2027 targets to improve cost, speed, access and transparency, firmly embedding cross-border payment enhancements on the European agenda. Multiple forces are now converging to turn these objectives into practice.

The rapid rollout of instant payments in Europe and beyond has fuelled expectations that instant rails should also support cross-border flows – from individual remittances to corporate supply chains. Supporting this momentum are initiatives such as the ISO 20022 migration and other standardisation efforts, which are laying the groundwork for smoother end-to-end processing. At the same time, new technologies, organisational processes and market entrants are raising the bar for incumbents and challenging the status quo.

With expectations rising and the 2027 target date approaching, the industry must shift from ambition to execution. In this context, the launch of OCT Inst represents a particularly promising step. Based on the EPC’s One-Leg Out Instant Credit Transfer Scheme, OCT Inst leverages existing infrastructure building blocks, standards and procedures to enable instant processing of the euro leg of a cross-border transaction. This provides payment service providers (PSPs) operating in Europe with a framework to design propositions that not only support them in meeting the G20 targets, but also deliver cross-border services that represent a tangible improvement for their customers.

Our latest paper, Get ready for OCT Inst!, which has been delivered by our Expert Group on Cross-Border Payments (EGXP), sets out a clear call to action: PSPs should begin implementation planning without delay – but success will ultimately depend on collaboration. Building pan-European market practices and taking coordinated steps at both the individual and collective level will be essential to driving momentum and ensuring OCT Inst delivers on its promise.

Why focus on OCT Inst

To help market participants assess which initiatives could best advance the G20 targets, we first carried out a stocktaking survey designed by the EGXP in 2024. This survey covered 13 cross-border payment initiatives with a European footprint. The results showed that while each contributed in some way, their ultimate effectiveness depended largely on the industry’s capability to build reach for any of these new initiatives.

Among the options, OCT Inst stood out as particularly promising. Not only has the scheme already been implemented by Iberpay for the Spanish community and by EBA CLEARING at a pan-European level, but it also leverages existing SEPA Instant building blocks – making implementation relatively straightforward for PSPs compared with other alternatives.

Respondents viewed OCT Inst as well placed to meet customer expectations for fast, transparent and cost-efficient payments in particular, while also positioning Europe to play a leadership role in delivering the G20 objectives. Interest from communities outside Europe in gaining instant access to Europe for cross-border payments with a euro leg has added further momentum.

With modest effort required and significant potential impact, OCT Inst has become a natural focal point for industry action – and, crucially, one that is ready to use. Since November 2024, EBA CLEARING’s pan-European OCT Inst solution has provided PSPs with a compliant, truly scalable infrastructure across Europe. 

This means OCT Inst can deliver its full range of benefits consistently across Europe, which – as further detailed in our paper, include:

• Fit-for-purpose design enables PSPs to offer propositions with enhanced speed, transparency, traceability and cost certainty.
• 24/7/365 availability supports cross-border payments with a euro leg at any time.
• User-friendly experience based on familiar SEPA standards, processes and interfaces for both sending and receiving legs.
• Ease of implementation for PSPs thanks to reuse of existing models, infrastructure and tools.
• Compliant use of SEPA rails: OCT Inst facilitates the compliant use of real-time payment rails built for SEPA, creating a level playing field between all PSPs.
• Interoperability potential: Can be linked with initiatives such as Swift CBPR+ to boost end-to-end speed, security and traceability.
• Pan-European scope through the SEPA-wide framework of OCT Inst, which holds the potential of broader reach and greater scalability than niche or closed-loop propositions.

OCT Inst – what it means in practice

Taken together, these features translate into tangible value in practice – powering a wide range of cross-border use cases – from real-time remittances and low-value, pay-as-you-go transactions for the digital and gig economy, to embedded supply-chain payments, international mobile solutions and efficient pension distribution.

OCT Inst also paves the way for propositions that meet the needs of different customer audiences. For consumers and SMEs, the priorities are ease of use, reliability and cost efficiency. OCT Inst enables PSPs to deliver on these expectations by offering a seamless, predictable customer experience that builds trust. Urgent payments such as remittances or insurance payouts can settle instantly with OCT Inst, while 24/7/365 availability ensures transfers align with the reality of smartphone-enabled banking outside traditional hours.

Corporates, by contrast, place the greatest emphasis on certainty and control. OCT Inst supports this by facilitating more accurate cash forecasting, full traceability and easier reconciliation, combined with transparent, predictable costs – with 24/7 cross-border settlement to support time-critical activities. By extending the benefits of SEPA Instant to cross-currency environments, OCT Inst can also help corporates adopt (or expand) direct-selling models.

For PSPs that operate as customers of other PSPs, the need is for low-cost, high-certainty services to handle retail, SME and remittance flows. OCT Inst provides instant and reliable settlement across corridors, with easier integration thanks to reuse of existing SEPA standards and infrastructure components. It also supports embedded payment capabilities within customer journeys, making it particularly valuable for non-European institutions seeking to distribute pensions or other recurring payments directly into European accounts, provided sufficient reachability is in place.
Call to action: act now on OCT Inst

These examples highlight the potential of OCT Inst – but its real power lies in the fact that it is already moving from concept to reality. In May 2024, Iberpay and Banco Santander processed the first instant international transfer under the OCT Inst Scheme, with the transaction initiated and completed in different currency areas. By November 2024, all Spanish banks had unanimously implemented OCT Inst, creating full national alignment. This Spanish showcase demonstrates that OCT Inst can be deployed quickly and at scale – and offers valuable lessons that can serve as a springboard for building Europe-wide reach.

The question now is how PSPs can take this to the next level. With relatively limited effort required and the potential for significant impact, they must seize the opportunity to prepare for OCT Inst. Success will hinge on collective action – the development of pan-European market practices that guarantee a genuinely better cross-border experience and, above all, the creation of a pan-European frontrunner group to define how critical mass can be achieved: by setting a clear delivery timeline and securing commitments from early movers. The creation of such a group is already underway, as confirmed by EBA CLEARING’s recent announcement that 10 major multinational banks are planning to build up reach for OCT Inst payments in line with the 2027 target date of the G20 Roadmap.

To make tangible progress by 2027, the implementation of OCT Inst must be treated as a key priority by a growing number of PSPs within the next couple of years. The time to act is now.

About the author

Annick Moes is Head of Industry Issues, Cooperation Initiatives and Communications at the Euro Banking Association. Annick is responsible for the EBA’s market practices and regulatory guidance stream, which provides the European payments ecosystem with a pan-European perspective and practical support. Prior to joining the EBA Group in 2003, Annick worked in journalism and market research. 

 

About the Euro Banking Association

With over 170 members from the European Union and beyond, the Euro Banking Association (EBA) is the largest cross-sectoral network of payment practitioners with a pan-European vision. Its deliverables relate to thought leadership and innovation, market practices and regulatory guidance as well as networking events and trainings.