Europe’s banks urged to prepare for OCT Inst as pressure mounts

The Euro Banking Association (EBA) has issued a timely call to arms for Europe’s payment service providers (PSPs), urging them to accelerate preparations for One-Leg Out Instant Credit Transfers (OCT Inst).

OCT Inst pressure mounts

With cross-border payments under unprecedented scrutiny, the EBA’s latest white paper sets out both the rationale and the roadmap for adoption, positioning OCT Inst as a vital step in meeting the G20’s 2027 targets for faster, cheaper, more transparent international transactions.

At its core, OCT Inst seeks to harness the infrastructure of SEPA instant payments to extend real-time capability beyond Europe’s borders.

Unlike traditional cross-border mechanisms, which remain fragmented and costly, OCT Inst promises 24/7/365 interoperability with an emphasis on speed, accessibility and cost efficiency.

This approach, the EBA argues, can deliver a markedly improved customer experience for consumers, SMEs and corporates alike—groups increasingly vocal in their demand for seamless international payments.

The white paper identifies several forces converging on the industry.

Customers expect immediacy in financial services, global standards are evolving around ISO 20022 and Swift CBPR+, and regulators are insisting that the persistent shortcomings in cross-border transactions—opaque fees, lengthy settlement times and patchy reach—are finally resolved.

The G20 Roadmap has crystallised these ambitions into four measurable criteria: cost, speed, access and transparency.

OCT Inst, according to the EBA’s Expert Group on Cross-Border Payments (EGXP), is one of the few practical pathways to meet these goals on time.

However, the paper is not blind to the obstacles.

Reach remains a critical challenge: unless a critical mass of PSPs adopt the scheme, coverage will be limited and corridor consistency compromised.

Harmonisation of market practices is equally essential; without it, customers will continue to encounter unpredictable experiences depending on geography or counterparties.

In response, the EBA recommends the creation of a pan-European “frontrunner group” of PSPs to pool resources, align practices and build the network effects that will make OCT Inst viable.

The message is clear: action cannot be deferred.

“The next step is in our hands,” said Simon McConnell, Chair of the EGXP.

He emphasised that the debate had shifted from theoretical benefits to concrete implementation, with PSPs expected to begin planning against the European Payments Council’s OCT Inst Rulebook without delay.

For the industry, OCT Inst presents both a defensive necessity and a strategic opportunity.

Failure to modernise exposes European institutions to competitive pressure from fintechs and non-bank challengers who are already adept at delivering near-instant cross-border solutions.

Yet proactive adoption could reinforce Europe’s payments ecosystem, creating a standardised, user-friendly solution that strengthens trust in regulated providers while supporting global interoperability.

As the countdown to 2027 accelerates, the EBA’s paper reads less like an academic exercise and more like a survival guide.

PSPs that engage early will not only be better placed to meet regulatory expectations but may also capture a first-mover advantage in an arena where customer loyalty hinges on speed and reliability.

The question is no longer whether OCT Inst will happen, but how quickly Europe’s banks are willing to make it a reality.