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Digital, Innovation, Payments

Implementing instant payments: Luxembourg gears up for 2025

Published on 05 January 2025

The instant payments regulation is being implemented in two phases, starting with incoming SEPA credit transfers. From 9 January 2025, payment service providers (PSPs) must process received SEPA credit transfers instantly, 24/7. The second phase, focusing on outgoing instant payments, follows on 9 October 2025. These milestones mark a significant step in the EU’s vision for faster, more efficient payment systems across member states.

Summary

    Understanding the regulation

    The instant payments regulation aims to make real-time payment processing a standard feature in Europe. By ensuring that incoming payments are handled instantly, consumers and businesses can enjoy greater convenience and efficiency. The second phase will complete this transformation, enabling outgoing payments to be processed in real time as well.

    “This step-by-step implementation reflects the need to adapt existing banking infrastructure to meet the demands of 24/7 payment systems while ensuring compliance with strict regulatory requirements,” explains Galina Miroshnichenko, Adviser for Payments & Digital at the ABBL.

    This step-by-step implementation reflects the need to adapt existing banking infrastructure to meet the demands of 24/7 payment systems while ensuring compliance with strict regulatory requirements.

    Galina Miroshnichenko

    Adviser – Payments & Digital, ABBL

    Supporting the transition

    The ABBL has been actively working to support its members in adapting to these new standards by:

    • Hosting workshops and conferences to share expertise and foster collaboration among financial institutions.
    • Providing technical guidance and assistance through its Instant Payments Task Force.
    • Acting as Luxembourg’s National Adherence Support Organisation (NASO) for SEPA schemes, helping PSPs navigate compliance requirements.

    Opportunities and challenges

    The shift to instant payments opens up new opportunities for innovation, such as enhanced digital wallets, real-time lending, and seamless cross-border payments. However, the transition is not without its challenges, including:

    • Upgrading legacy systems to support real-time processing.
    • Managing liquidity on a continuous basis, particularly outside regular business hours.
    • Ensuring real-time compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.

    “The adoption of advanced technologies like AI and machine learning will be critical in addressing these challenges,” adds Galina.

    A collaborative effort

    Luxembourg’s financial institutions are working closely with the ABBL, regulators, and technology providers to ensure a smooth transition. By continuing to modernise systems and strengthen compliance frameworks, the sector is well-positioned to meet the demands of instant payments while maintaining its reputation for excellence.

    As the first phase of the instant payments regulation takes effect in January 2025, Luxembourg’s financial sector is preparing for a major transformation. By embracing this shift, financial institutions can enhance customer experience, foster innovation, and strengthen the country’s competitiveness in the European payments landscape.

    Galina Miroshnichenko

    Galina Miroshnichenko

    Adviser – Payments & Digital, ABBL

    Published on 05 January 2025

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