SEPA Instant – Happy Path Flow

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SEPA instant is a “PUSH” type of payment where funds are pushed from the Originator’s account to the Beneficiary’s account. The “Targeted” completion time for a SEPA instant payment is 10 seconds (with a hard time-out of 20 seconds). This is monitored and controlled by the CSM(s). This time starts when the payment message leaves the originator PSP and ends when funds are credited to the Beneficiary’s account.

It is important to understand that all SEPA instant payments are singleshot payments ie. Each payment is sent to the CSM individually and they are not bulked.

Let us dive right into the flow

Note: Customers of banks can and should be able to initiate SEPA instant payments from all the channels (internet banking, mobile banking, corporate internet banking, etc) where SEPA credit transfer is available starting Oct 2025.

When a customer initiates a SEPA instant payment it (Usually) gets converted to a pain.001 messages that land in the Originator PSP’s back office payment processing application aka. Payment Engine or the payment engine exposes an API that is used by the front-end applications to initiate a payment.

The payment initiation will result in the payment request being processed by the Originator PSP and if all the checks are successful then a pacs.008 message is generated and sent out to the CSM. The payment is stamped with the time and date just before it is sent out in the “AccptncDtTm” tag.

This tag is used for checking the time-outs.

The pacs.008 is sent to the CSM and the CSM in turn routes the payment to the Beneficiary PSP. The CSM, before routing the payment to the beneficiary, checks if the 20-second cut-off (AccptncDtTm + 20 sec) has been breached. If it is not breached then and only then the payment is routed to the beneficiary PSP.

We will discuss in detail the different cut-off breaches that can occur in the SEPA instant payment processing lifecycle in a separate article.

Beneficiary PSP receives the pacs.008, performs all the checks and responds to the CSM with a pacs.002 (ACCP) which means that it can accept the payment. This step is quite different from payment processing steps of other payment types like SEPA classic aka SCT.

The pacs.002 (ACCP) says to the CSM that the beneficiary PSP can successfully accept the payment and credit the funds to the beneficiary customer. At this point, the money is not credited to the beneficiary customer yet.

Btw pacs.002 (ACCP) means that it is pacs.002 with “ACCP” in ‘Group Status’ 

Once the pacs.002 (ACCP) is received by the CSM it checks if the time-out has been breached once again. In the case that it has not, the CSM settles the funds between the Originator PSP and Beneficiary PSP.

This is followed by two pacs.002 messages being sent, one to the originator PSP and one to the beneficiary PSP.

Both of these are pacs.002 (ACCP).

* The 2nd pacs.002 from CSM to Beneficiary PSP is not mandated by the scheme

The originator PSP debits the originator’s accounts after it receives the pacs.002 (ACCP) from the CSM and the Beneficiary PSP credits the funds to the beneficiary after it receives the pacs.002 (ACCP) from the CSM.

Originator PSPs can also debit the Originator’s account the first time it sends out the pacs.008 (Step2) . The scheme recommends that the originator PSP reserves the funds when the original pacs.008 is sent but it is purely the originator PSP’s decision.

The Originator is notified that the payment was successful.

I am always astonished that all these steps can happen within 10 seconds when 1000s of transactions are processed every day. Huge shout out to all the engineers, IT professionals, Regulators, and business folks who make this happen on a day-to-day basis.

Blog Comments

You explains payment flow concept in such manner that even layman will understand easily. You are a great mentor for payment enthusiastics. Kudos to you.

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