SEPA Instant settlement in one diagram
Real-time transactions in Europe
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Welcome to a new installment of Payments Bites—your go-to source for compact, easily digestible, and visually engaging articles on payments technology. In today's feature, we will jump into the mechanics of SEPA Instant clearing and settlement, illustrated through a comprehensive diagram.
SEPA Instant is a payment mechanism that enables real-time money transfers within the Single Euro Payments Area (SEPA), facilitating instant clearing and settlement of transactions. SICT is specified in one rulebook however has multiple implementations across Europe.
As we've discussed in prior episodes of The Engineer Banker, Europe hosts two prominent pan-European SICT infrastructures: RT1 and TIPS. Additionally, certain countries have their own domestic SICT implementations; for instance, Spain has Iberpay’s implementation supporting Bizum. In this article, we will depict how RT1 handles transactions and explore the standard clearing actions carried out on the beneficiary's end.
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As both TIPS and RT1 adhere to the four corners model referenced in the rulebook it may be more correct/understandable to label that box with the more standard CSM term.