How APIs are making SEPA Instant Payments easier to adopt

Overview

• SEPA Instant Credit Transfers have been available for several years, but adoption is accelerating as the Instant Payments Regulation introduces new requirements for euro instant payments.
• APIs are helping businesses make the most of SEPA Instant by combining automated payment processes with faster, real-time euro payments. This allows businesses to initiate payments, track their status and reconcile transactions directly from their own platforms.
• This article explores how API-driven payment infrastructure enables businesses to send SEPA Instant Payments in real time, without relying on manual processes such as uploading files or managing payments through online banking portals.

Why APIs matter for SEPA Instant Payments

SEPA Instant Payments enable euro payments to be received within seconds, 24 hours a day, 365 days a year, including weekends and bank holidays.

Unlike traditional SEPA Credit Transfers (SCT), which typically rely on scheduled processing cycles, SEPA Instant Payments allow businesses to move funds faster and with greater flexibility.

For businesses that regularly send payouts, such as marketplaces paying sellers, platforms paying drivers or freelancers, payroll providers, and tipping platforms, SEPA Instant Payments can help improve payment speed and provide quicker access to funds.

API payment integration extends the benefits of SEPA Instant Payments by allowing payment initiation, status updates and reconciliation to happen directly within a business’s own platform. This reduces reliance on manual processes, such as bank portals or spreadsheet uploads, and helps businesses build faster and more efficient payment workflows.

SEPA Instant Payments have been available since 2017, but adoption has been slower than expected. In 2023, only around 18% of euro credit transfers were processed as SEPA Instant Payments, despite growing demand from consumers and businesses. The investment required for banks and payment service providers (PSPs) to upgrade their infrastructure has been a key factor behind the slower adoption.

The Instant Payments Regulation (IPR) is accelerating the availability of instant euro payments across Europe, while also introducing new requirements around pricing, Verification of Payee and sanctions screening.

As more providers introduce API-based SEPA Instant Payments, businesses will find it easier to integrate instant euro payments into their existing systems, automate payment processes, and improve efficiency through API payment integration. As more providers introduce API-based SEPA Instant Payments, businesses will find it easier to integrate instant euro payments into their existing systems through API payment integration, helping automate payment processes and improve efficiency.

APIs replace scheduled file uploads and manual transfers with direct, automated payment processing. Payments can be scheduled in advance or triggered automatically by events within a business’s systems.

Payment logic can be built directly into a business’s or platform’s workflows, determining who gets paid, from which account, and when.

With API payment integration, new payment types, such as SEPA Instant payments, can typically be introduced through an existing integration, without rebuilding file formats, updating account configurations or completing additional application forms.

When accessing SEPA Instant Payments through an API, businesses can also configure real-time webhooks to receive payment updates as they happen. This supports real-time reconciliation at the transaction level, rather than waiting for scheduled report files. Alternatively, businesses can retrieve payment data from the API to support daily reconciliation if that better suits their processes.

Compared with alternatives such as XML files or manual transfers, there are several reasons businesses may choose API payment integration to automate their euro payments.

• Reconciliation: Real-time webhooks provide payment status updates at the transaction level, removing the need to wait for batch file responses.
• Integration: There is no need to build and maintain file format mappings or bulk upload specifications. Standardised API requests and responses can reduce development time, particularly for businesses already familiar with APIs.
• Testing: Payments API providers typically offer a sandbox environment, allowing businesses to test their integration before moving to production.
• Timeliness: API integrations supported by clear documentation enable developers to begin building without lengthy implementation processes. New payment types, including SEPA Instant payments, can typically be introduced through an existing integration, without requiring a separate application process.

Once integrated, APIs can simplify the day-to-day management of SEPA Instant Payments. Real-time payment status webhooks provide transaction updates as they happen, removing the need to wait for report files or manually check a banking portal.

Built-in error handling and retry logic can help increase the likelihood of successful payment processing and resolve some issues automatically, reducing the need to edit and re-upload XML files manually. Some API providers also allow multi-user authorisation to be built into payment workflows, while making transaction data and audit trails available through the API, so backend systems can retrieve the information they need.

Where approvals are required, they can be incorporated into the payment flow, allowing payment batches submitted through the API to be approved by one or more people before they are processed. As payment volumes grow, API payment integration also makes it easier to scale payment operations without adding administrative overhead.

Fire’s API-first approach allows businesses to access multiple payment methods and schemes through a single integration. This includes SEPA Instant euro payments alongside sterling Faster Payments, traditional euro SEPA Credit Transfers, and cross-border payments in currencies such as US dollars.

Businesses have different requirements when it comes to control, oversight, speed and automation. With Fire, multi-user authorisation can be configured where required, allowing businesses to add approval steps for outbound payments or payments above a certain threshold.

Fire’s testing environment supports businesses throughout the integration process, allowing developers to test API endpoints and webhooks before moving to production.

Once integrated, businesses can benefit from greater visibility and control over their payment activity through real-time reconciliation and event-driven webhooks. Fire also supports Verification of Payee, helping businesses confirm they are sending payments to the correct person or organisation.

By using Fire’s range of payment services, businesses can choose the solutions that best fit their payment processes. Whether automating individual or batch payments, sending SEPA Instant Payments, or receiving payments through Open Banking Payments with Instant Euro Transfers, Fire provides the flexibility to support different payment workflows through a single platform.

The need for automated payouts varies by business, and APIs provide the flexibility to support different payment workflows. Payments can be triggered automatically based on events, such as the approval of a refund request or the completion of a worker’s shift. Businesses can also automate time-based workflows to trigger batch payouts at specific times, such as payroll or Just-Tip Tuesdays.

Where required, some providers allow businesses to configure approval steps within their API integration, helping to ensure payments follow internal controls. Businesses can also use the same integration for different payment types, from individual payments such as refunds or user-triggered payouts through an app to batch disbursements such as weekly seller payouts.

As payment volumes grow, API integrations make it easier to scale from a small number of payouts to thousands per day without changing file formats or upload processes. Businesses can also build payment approval logic that matches their internal requirements, including single-user or multi-user batch approvals.

• System compatibility: Some existing business systems may not support APIs, making XML file-based payments easier to implement in the short term. Where systems support API integrations, businesses can connect directly to their payment provider and automate payment processes without relying on file uploads.
• Scalability: Both XML files and API integration can support automated bulk payments. However, for businesses that rely heavily on automated SEPA Instant Payments, such as platforms looking to bring payment capabilities to market, API integration can provide a more scalable and flexible solution as the business grows and requirements change.
• Automation: Both approaches allow payments to be processed automatically. However, businesses looking to reduce manual touchpoints, such as during error handling, may benefit from API integration, where processes such as retries and payment updates can be automated. File-based solutions typically require more manual intervention when issues occur.
• Resources: File-based solutions can often be quicker to set up initially but may require ongoing maintenance and do not always remove administrative overhead. API integrations can take a similar or longer implementation time depending on requirements and internal expertise, but they can provide greater efficiency and flexibility over time.

Ready to get started with SEPA Instant Payments?

Learn more about Fire’s Payments API, explore our developer resources, or contact our team to discuss your integration requirements.

While SEPA Instant Payments launched in 2017, adoption has been slower in some markets, including Ireland, where usage was relatively low before the introduction of the Instant Payments Regulation. While consumers, businesses and payment service providers (PSPs) have continued to drive demand, wider adoption has required significant investment in areas such as technical infrastructure, liquidity management, fraud prevention, monitoring systems and operational processes.

Integration timelines vary depending on the complexity of the project, the systems being connected, and your team’s available resources and timelines. Like traditional payment integrations, the time required will depend on your specific requirements, testing process and implementation approach.

A webhook, or callback, is an event-driven message that sends real-time data to your backend systems when an action occurs. This is important in many payment processing scenarios, as it enables real-time reconciliation, confirmation of funds and order fulfilment, or can trigger automated actions such as starting a payroll cycle or updating payment records.

Yes, if a payment provider offers access to multiple payment methods and schemes, businesses can typically access them through a single integration. For example, Fire’s Payments API allows businesses to send batch payouts in euro via SEPA Instant Payments or traditional SEPA Credit Transfers, sterling via Faster Payments, and other currencies through local payment methods.

The Fire Payments API makes it simple for businesses to start using SEPA Instant Payments. Businesses can specify the batch type when creating a payment, and Fire will route eligible payments through the SEPA Instant Payments scheme rather than the standard SEPA Credit Transfer process.