The European banking sector is experiencing unprecedented transformation with the adoption of the new Instant Payment Regulation (IPR) in March 2024. This fundamental regulatory evolution marks a decisive turning point in European financial services history, compelling all financial institutions to fundamentally rethink their technological infrastructures. With the 2026 deadline approaching, low-code core banking solutions are emerging as the preferred strategic response to efficiently modernize traditional payment systems while ensuring full compliance with new requirements.

A New Regulatory Paradigm for Instant Payments

The European IPR regulatory framework, resulting from close collaboration between the European Parliament and Council, establishes a set of particularly demanding obligations for payment service providers. According to guidelines published by the European Central Bank, financial institutions must ensure euro payment processing according to unprecedented performance criteria: guaranteed execution in less than 10 seconds, total system availability 24 hours a day, 7 days a week, 365 days a year, with no service interruption permitted.

This digital banking transformation follows a precise and phased implementation schedule. The European Banking Authority has established a progressive compliance program extending from 2025 to 2027, taking into account different categories of financial institutions and their geographical location within the European Union.

Fundamental Obligations Under the New Regulation

The regulation introduces several major changes in the banking services landscape. For eurozone institutions, the ability to receive instant payments becomes a legal obligation from January 2025. This first phase will be followed by the obligation to issue instant payments, which must be fully operational before October 2025. Payment institutions and electronic money institutions benefit from an additional deadline, set for April 2027, to achieve full compliance with these new requirements.

A crucial aspect of this regulation concerns service pricing. Instant payments cannot be charged at a rate higher than traditional transfers, a measure aimed at encouraging mass adoption of this new payment method by consumers and businesses. The Basikon Core Banking platform natively integrates this fair pricing requirement into its transaction management system.

Technological Challenges of Digital Transformation

Adapting existing core banking systems represents a major technical challenge for the banking sector. Traditional infrastructures, often based on monolithic architectures developed decades ago, prove inadequate to meet new requirements for real-time processing and continuous availability. This situation requires a profound overhaul of banking information systems.

Modernization involves several critical technical aspects. Systems must now guarantee ultra-fast transaction processing, with response times under 10 seconds, while maintaining optimal security. This performance requirement comes with unprecedented scalability needs, as infrastructures must absorb significant load peaks without service degradation.

The Low-Code Approach: A Strategic Response to Modernization Challenges

The low-code platforms are revolutionizing the traditional approach to banking system modernization. This innovative technology allows financial institutions to significantly accelerate their digital transformation while minimizing risks associated with major IT overhaul projects. The customer experience of Arrawaj demonstrates the effectiveness of this approach, with complete deployment achieved in just 18 months, enabling the processing of over one million daily accounting entries.

Practical Implementation of Instant Payment Systems

Implementing an instant payment infrastructure requires a rigorous methodological approach and careful planning. The transformation process begins with an in-depth audit of existing systems, followed by developing a target architecture that meets regulatory requirements. The Basikon Core Lending solution facilitates this transition through its modular architecture and advanced integration capabilities.

The technical architecture required to support instant payments relies on several essential components. The system must integrate intelligent transaction routing mechanisms, massive parallel processing capabilities, and real-time monitoring systems. The banking platform must also ensure perfect synchronization with European clearing systems and national payment infrastructures.

Security and Compliance in the Instant Payments Era

Transaction security is paramount in the context of instant payments. Financial institutions must implement real-time fraud detection mechanisms capable of analyzing each transaction within milliseconds. These systems rely on sophisticated artificial intelligence algorithms to identify suspicious behavior and block potentially fraudulent transactions before execution.

Regulatory compliance also requires implementing enhanced verification processes. The new regulation specifically mandates a Verification of Payee (VoP) system before executing each instant payment. This functionality, natively integrated into Basikon's core banking platform, significantly reduces the risks of fraud and payment errors.

Preparing and Adapting Existing Infrastructures

Adapting existing infrastructures requires a progressive and methodical approach. Financial institutions must conduct a detailed assessment of their current systems, identify gaps against new regulatory requirements, and establish a precise roadmap for their transformation. This preparatory phase is crucial for ensuring a smooth transition to instant payments.

System modernization also involves reviewing operational processes. Teams must be trained in new procedures, workflows must be optimized to meet real-time constraints, and support systems must be adapted to manage new continuous availability requirements.

Frequently Asked Questions About 2026 Compliance

How to Ensure Technical Compliance with Instant Payment Requirements?

Technical compliance relies on implementing a robust and scalable system architecture. Financial institutions must ensure their infrastructure can process transactions in real-time, maintain permanent system availability, and integrate seamlessly with European payment systems. Basikon's low-code platform offers these essential technical capabilities while simplifying the implementation process.

What Are the Organizational Impacts of Transitioning to Instant Payments?

The transition to instant payments requires significant adaptation of organizational processes. Teams must be reorganized to ensure continuous system monitoring, support procedures must be revised to guarantee immediate responsiveness, and new skills must be developed within technical and operational teams.

How to Ensure Service Continuity During the Transition Phase?

Service continuity during the transition phase represents a critical challenge. Basikon's modular approach allows for progressive system migration, thus minimizing service interruption risks. Features can be deployed in phases, enabling a controlled transition while maintaining existing services operational.

What Are the Risk Management Implications?

Risk management in the context of instant payments requires a comprehensive approach integrating transaction security, regulatory compliance, and operational resilience. Systems must include advanced fraud detection mechanisms, automated transaction verification processes, and robust backup systems.

How to Evaluate the Return on Investment of a Transformation Project?

ROI evaluation must consider several factors: savings achieved through process automation, improved customer experience, reduced maintenance costs, and new business opportunities generated by the ability to offer instant banking services.

Prepare your institution for 2026 regulatory requirements by adopting Basikon's low-code Core Banking solution. Request a personalized demonstration to discover how to efficiently modernize your payment infrastructure and ensure a successful transition to instant payments.