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How Numeral supports SEPA instant payments

November 18, 2022

Launched in 2017, SEPA instant credit transfer is SEPA’s version of instant payments. SEPA instant payments are processed 24/7/365, are received in less than 10 seconds, and are irrevocable.

From insurance claim payments to merchant payouts through investment account top-ups, instant payments dramatically accelerate the time-to-money. They enable companies and individuals to pay and be paid faster than with regular bank transfers and without the high fees associated with card payments. 

Despite their various benefits, SEPA instant payments only represented 11% of all SEPA credit transfers in March 2022, with 29% of banks yet to support SEPA instant payments as of June 2022. On October 26th, 2022, the European Commission released a policy proposal to further accelerate the adoption of SEPA instant payments.

The Numeral platform supports SEPA instant payments, in addition to regular SEPA credit transfers as well as SEPA direct debits. Customers can use the Numeral API to integrate SEPA instant payments into their products and build user experiences that leverage instant, irrevocable payments.

In this article, we explain how Numeral can be used to automate SEPA instant payments, from initiation to reconciliation. We also unveil some of the exciting features we will launch in early 2023.

Sending SEPA instant payments with Numeral

A single API to initiate payments

The Numeral API enables companies to initiate SEPA instant payments with their banks without building a direct bank integration and going through a long and complex project. Sending a SEPA instant payment is as easy as making an API request with the payment amount and reference as well as beneficiary IBAN and country.

It is the same API that can be used to initiate regular SEPA credit transfers as well as SEPA direct debits. Changing payment methods only requires changing one parameter in the API request.

Approval workflows

After they have been created, finance and operations teams can review and approve or cancel payments through the API or web app before they are sent to their banks. 

Approvals can be set up at the single payment or payment batch level. They can also be skipped entirely if companies have implemented their internal controls and approval workflows right into their systems and tools.

Every payment approval or denial is logged and is accessible in the audit trail of the payment for traceability and auditability purposes.

Real-time notifications

After a company has initiated a SEPA instant payment, Numeral retrieves its status from the bank and notifies the company of its proper execution or rejection (including rejection cause). Notification events can be sent through webhooks in real time or retrieved by querying the events endpoint in the Numeral API. Automated status updates save companies from manually checking and updating the status of their payments. 

Real-time notifications enable engineering teams to build advanced payment workflows into their products, and finance and operations teams to troubleshoot any anomaly.

Automated reconciliation

Finally, Numeral retrieves account reports from the bank and reconciles them with the corresponding payments.

A reconciliation is created for every combination of a payment order and a transaction. Every reconciliation triggers the creation of an event, which can again be sent through webhooks or retrieved manually.

Automated reconciliations save companies the tedious task of manually reconciling their accounts to match transactions with payments.

New SEPA instant payments-specific features

In addition to initiating, updating, and reconciling SEPA instant payments, we are working on a number of features. These features, to be rolled out progressively in early 2023, will make it easier and more reliable for companies to send large numbers of SEPA instant payments.

Reachability check

In 2022, 29% of banks across the SEPA zone still do not support SEPA instant payments. They are not participants to the SEPA instant credit transfer scheme and do not have the capabilities to send and receive payments in real time. SEPA instant payments sent to these banks will thus be rejected.

A good practice is to check what is called reachability before sending a payment. Reachability is the ability, for a given bank, to reach another bank through a given payment network or scheme. In the case of SEPA instant payments, it is the ability, for a given bank, to receive SEPA instant payments.

Numeral will enable companies to check if a bank is eligible for SEPA instant payment and decide if and how they want to fall back to a regular SEPA credit transfer. The feature will leverage bank data, third-party data, and proprietary data. 

Fallback management

To further automate fallback management, Numeral will also enable companies to set fallback rules at payment level and choose between two options: 1. Instant payment only, with no fallback 2. Instant payment, with fallback to regular credit transfer

Different banks have different ways to manage fallback. Some banks might not support fallback, while others will automatically fall back to regular credit transfer. Check with our team to know if and how your bank supports fallback. 

Beneficiary verification

Because SEPA instant payments need to be processed in real time and cannot be revoked (i.e., they cannot be recovered after they have been sent), they are prone to fraud. 

The European Commission’s policy proposal dated October 26th, 2022 will also make it mandatory for sending banks to verify that the identity of the account holder matches the name of the beneficiary provided by the payer prior to executing a SEPA instant payment.

Although non-bank payment services providers and companies are not directly concerned, they might want to verify the identity of beneficiaries to prevent payments from being rejected, especially if they process large numbers of payments.

This can be done through a variety of methods, including:

  • Micro deposit or debit verification: send a small-amount bank transfer to or collect a small-amount direct debit the beneficiary’s bank account to verify that their have access to the account

  • Third-party verification, leveraging solutions such as Trustpair, Sis ID, SurePay, or SEPA Mail Diamond

  • Proprietary data

In addition to managing counterparties and counterparty accounts, Numeral will enable companies to verify the identity of counterparties through our API and web app.

Successfully launch SEPA instant payments with Numeral

Numeral enables companies to automatically send, receive, and reconcile payments across banks and payment methods through a single API and web app. With Numeral, companies can process insurance claim payments, pay out merchants, or receive payments, all in real time.

If you like to learn more about SEPA instant payments, we recommend downloading our Guide to SEPA Instant Credit Transfer. You can also subscribe to our newsletter to receive future updates and publications.

Lina Mechat

🏗️ Product @ Numeral

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