In a previous article, I examined firms’ preparedness to comply with the Instant Payments Regulation (IPR) SEPA Instant mandates and the challenges they face. But there is now also a question for EMIs and PIS around how they access the SEPA scheme. 

Traditionally, most EMIs and PIs have accessed the Single Euro Payment Area (SEPA) payment schemes as indirect participants, through a partner bank that acted as a settlement and connectivity provider. This model made sense, as sponsor banks absorbed the complexity of: 

• connectivity to clearing and settlement mechanisms 
• liquidity management and prefunding 
• regulatory reporting and scheme changes 

The IPR’s changes to the Settlement Finality Directive open the door for eligible EMIs to become direct participants in SEPA clearing systems. This status was previously limited to credit institutions. 

Non‑banks now have a spectrum of options, from continued indirect participation to full direct access. Our latest research, ‘SEPA Instant: Build it and they will come,’ suggests that some EMIs and PIs are looking to capitalise on it. 

That doesn’t mean direct access is the right answer for everyone. But it does mean the decision is no longer purely operational. It has become a question of control, resilience, differentiation and long‑term economics, as I'll discuss in more detail below. 

Despite the new possibility of direct participation, most EMIs and PIs expect to continue using sponsor banks in the near term. According to Celent’s survey, 59% of PIs and 46% of EMIs intend to continue with indirect access via partner banks for the foreseeable future.  

The reasons are pragmatic rather than conservative. 

One factor is that it generally involves lower initial setup and compliance costs. However, when Celent asked these institutions why they continue to use a bank partner for access, cost came bottom of the list, with 17% ranking it as the number one driver. 

The primary reason is simplicity. Non-banks don’t want to deal with complex technical infrastructure or payment intricacies; 81% of non-bank respondents ranked this among their top three reasons, with 42% having it as their number one choice. Simplicity was followed by ‘faster time to market,’ with 64% calling it out as one of the top three choices. 

Many market participants still view the sponsor‑bank model as an efficient way to meet regulatory obligations, particularly for institutions operating at modest volumes or across multiple jurisdictions. For these providers, direct access would add operational burden without necessarily delivering proportional benefit. 

At the same time, several EMIs and PIs are reassessing their approach. 12% of those surveyed already have direct access to SEPA Instant, and 41% are actively considering applying within the next one to two years. Of course, considering a course of action doesn’t mean they will ultimately implement such significant change. 

However, it’s also clear that their motivations are strategic rather than regulatory. It also shouldn’t come as a surprise, given that European EMIs and PIs span a diverse range of firms, from single market-focussed fintechs to pan-European payments platforms.  

Those firms exploring direct access tend to cite four reasons for wanting to be direct participants: 

• Greater control over payment flows (65%) 
• Increase their ability to launch new services (55%) 
• Ability to innovate and launch new use cases (55%) 
• Potential cost efficiencies at scale, particularly as instant volumes grow (50%) 

As SEPA Instant becomes the default payment method, reliance on external partners for execution speed, availability and prioritisation becomes a more visible dependency. For higher‑volume or fast‑growing providers, that dependency can start to feel like a constraint. 

While a large share of non-banks appears comfortable with maintaining indirect access, banks should not get complacent. One of the clearest signals from the Celent research is that service quality now matters more than ever. For non‑banks, the SEPA Instant requirements mean the access model itself becomes part of the customer experience, even though end customers never see it. 

A majority, 54% of EMIs and PIs, indicated they would consider switching sponsor banks if the SEPA Instant service they received was not good enough, agreeing with the statement “We would consider changing banks if their SCT Inst service was not good enough”, and 24% were neutral. Just 22% disagreed. 

This is a notable shift because instant payments make performance tangible. Delays, outages or degraded service are no longer abstract technical issues – they are experienced immediately by end users. 

For banks, this raises the bar and providing indirect access for these firms will involve: 

• predictable execution times 
• consistent 24/7 availability 
• robust fraud controls and exception handling 

As I discussed in my previous article, many banks face the challenge of upgrading legacy core banking systems to support 24/7/365 operations and 10-second processing windows to meet the clients' expectations. Implementing instant payments entails high costs, including these technology upgrades, and the delivery of new services under the IPR, such as VoP. 

What emerges is not a right or wrong answer, but a divergent set of approaches. 

Smaller and mid‑scale EMIs and PIs may continue to prioritise speed, focus and flexibility through indirect access. That makes choosing the right banking partner even more important and requires a thorough market analysis. 

Other providers may see direct participation as a way to future‑proof their payment capabilities and differentiate their service. But they must also account for the increased ongoing operational costs that this is likely to entail. 

Firms considering this route must be prepared to take on: 

• direct liquidity management for instant settlement 
• 24/7 operational support and monitoring 
• scheme participation, change management and compliance obligations 
• increased exposure to reputational and operational risk 

As SEPA Instant volumes grow and real-time payments become the expectation rather than the upgrade, these choices will matter more. Access decisions influence resilience, cost structure and the ability to respond to future changes, whether regulatory, technological or competitive. 

For some, these responsibilities align with existing capabilities and ambitions. For others, they represent a material distraction from core business objectives. 

In my next article, I’ll take a deep dive into how the IPR’s changes could create a significant shift in how European consumers and businesses pay, and the factors affecting SEPA Credit and SEPA Instant’s usage over the next decade.