OCT Inst: momentum builds for cross-border instant payments

As the payments community works to enhance cross-border payments, much of the focus has been on new technologies and emerging models. Yet are we overlooking the impact of existing building blocks?

A standout example is the European Payments Council’s One-Leg Out Instant Credit Transfer (OCT Inst) Scheme, which extends the benefits of domestic instant payments to cross-border transactions – enabling faster, more transparent and more efficient transfers.

Last September the Euro Banking Association (EBA) set out a clear call to action in its OCT Inst white paper, emphasising that progress would depend on collective effort – specifically, a pan-European roadmap and a frontrunner group to drive adoption.

That momentum is now becoming visible. In an EBA webcast on 26 March 2026, Get Ready for OCT Inst: How to Make Better Cross-Border Payments a Reality, close to 200 payments professionals reported on their implementation progress, with encouraging results. A live poll showed that 18% have already begun preparations, 56% are actively exploring OCT Inst, and just 25% have yet to prioritise it.

So what stage has the journey reached? This article explores recent industry developments, frontrunner experiences, the milestones that need to be hit to ensure successful adoption and several key takeaways from the EBA webcast.

 

Aligning OCT Inst with established SEPA building blocks

In November 2025, the European Payments Council (EPC) issued a letter addressing the misuse of the Single Euro Payments Area (SEPA) Credit Transfer (SCT) and SEPA Instant Credit Transfer (SCT Inst) schemes for cross-border transactions, highlighting the risks associated with such practices.

The letter – now publicly available – revealed that these domestic schemes were being used to process credit transfers where either the originator or the beneficiary – sending or receiving funds to or from a SEPA country – did not hold a payment account with a participant of the SCT or SCT Inst scheme within SEPA.[i] These so-called one-leg-out (OLO) transactions fall outside the scope of SCT and SCT Inst, which are designed exclusively for end-to-end euro payments within SEPA and are not intended for international transfers.

Commenting on the letter during an EBA webcast, Alex Loyden, Head of EMEA Global Clearing Product at J.P. Morgan Payments, stated: “The EPC’s letter clearly reiterates the distinction between domestic and cross-border payments and the appropriate use of schemes. From our perspective, this only strengthens the case for OCT Inst adoption, given its potential to deliver a cross-border experience more closely aligned with that observed with existing SEPA schemes.”

Reflecting this ambition, in its latest public consultation the EPC has taken further steps to align OCT Inst more closely with existing SEPA schemes. Open until 11 June, the consultation includes several proposals, most notably the introduction of the full amount principle. Under this approach, charges cannot be deducted from the principal amount, and the shared cost principle becomes the sole charging model for the euro leg of OCT Inst transactions. Already embedded in SCT and SCT Inst, this model is also well understood by PSPs and end users.

Loyden added: “From a charging perspective, predictability and transparency – including the full-delivery principle – are absolutely crucial and must be underpinned by clear rulebook provisions that provide reassurance to all stakeholders. Without such clarity and certainty, OCT Inst risks undermining its own potential. Encouragingly, I hope the proposed change request will gain support and be adopted.”

 

Lessons from early movers and next steps

In May 2024, Iberpay and Banco Santander processed the first instant international transfer under the OCT Inst scheme.[i] Today, approximately 80% of banks in Spain adhere to the scheme, with usage increasing.

The experience in Spain underscores the practicality of implementation. During the EBA webcast, Raouf Soussi Laghmich, Global Head of International Solutions at BBVA, said: “Compared with a full SEPA Inst implementation, OCT typically represents only between 10% and 15% of the cost – potentially even less if both workstreams are addressed simultaneously. When we started the project, it took approximately six to eight months to implement. One of the strengths of OCT Inst is that it builds on existing cross-border payment models and real-time infrastructure, creating opportunities to reuse capabilities, align with parallel initiatives, and integrate seamlessly into the broader payments architecture.”

Today, OCT Inst is already delivering tangible benefits to the Spanish community. By enabling instant cross-border payments across time zones, the scheme allows clearing markets such as the United States, Mexico and Canada to send funds into Spain outside traditional cut-off times, with beneficiaries receiving payments immediately. This enhances liquidity management, optimises treasury operations and improves the overall customer experience.

Nevertheless, challenges remain. Operational and compliance requirements are among the most significant, particularly when meeting stringent screening obligations within tight timeframes – sometimes resulting in rejected payments. Inconsistent rejection codes can further reduce transparency and complicate troubleshooting for customers.

To mitigate the impact of rejections on their customers, banks in Spain have agreed to automatically reroute failed OCT Inst transactions via traditional one-leg-out channels such as T2 or EURO1, helping to ensure continuity of processing.

Liquidity management is another critical consideration, as a 24/7 service demands continuous readiness across systems and infrastructure.

Addressing these issues, and ensuring interoperability between different OCT Inst systems, will be essential to unlocking the full potential of OCT Inst. This is already being advanced at a pan-European level through RT1 OCT Inst. In September 2025, EBA CLEARING announced that within two years 10 multinational banks will be reachable in its RT1 OCT Inst Service. The aim is to deliver a minimum viable model that provides a shared baseline for the industry to align on and scale from, in line with recommendations set out by the EBA.

Simon McConnell, Global Head of European Clearing & FI Payments at Citi, one of the RT1 institutions, explained why RT1 holds considerable potential for OCT Inst: “With RT1 OCT Inst, PSPs will be able to reuse existing capabilities from across EBA CLEARING’s SEPA services – including liquidity monitoring and management tools – to help reduce complexity and support operational consistency. At the same time, ongoing efforts by the ECB and EBA CLEARING to extend operating hours for T2 and EURO1 respectively should further strengthen the foundations for round-the-clock cross-border payments.”

 

OCT Inst and Swift’s cross-border consumer payments scheme

“Market demand for OCT Inst is clearly growing across all client segments, particularly among financial institutions in regions that already operate their own one-leg-out schemes and are seeking a comparable experience on the euro leg,” said Ciaran Byrne, Global Head of Product & Client Solutions – Institutional Cash Management at Deutsche Bank. “The way forward is, therefore, to recognise the broader global potential of OCT Inst and get ready to reap it. OCT Inst provides the foundational baseline for the much-discussed interlinkages between domestic instant payment schemes worldwide, while also supporting new initiatives such as Swift’s cross-border retail payments scheme.”

In this sense, OCT Inst represents one component of the broader cross-border payments landscape. By definition, it addresses only the SEPA leg of the transaction journey – either the inbound or outbound execution. PSPs using OCT Inst therefore depend on comparable schemes or arrangements applicable to the other leg of the transaction to be able to develop viable end-user offerings.

There are already signs of similar developments emerging in other parts of the world, with comparable capabilities either established or developing in markets such as Australia, Brazil, India, and Singapore.[i] Attention is also turning to the critical US-SEPA corridor. In April 2026, for example, the Federal Reserve Board invited public comment on a proposal that would allow U.S. banks and credit unions to use intermediaries to transfer funds through the FedNow Service,  which would enable them to transact with correspondent banks to facilitate the international portion of a cross-border payment.[ii] At the same time, The Clearing House has been advancing toward permitting international activity on The RTP® network, including one-leg-out and international on-behalf-of payments, and will take next steps in that direction later this year.[iii]

For maximum effectiveness and end-user benefit, any one-leg-out schemes should operate in harmony with both incumbent and emerging initiatives across the payments ecosystem. One initiative that has generated market discussion is Swift’s new cross-border retail payments scheme, announced in September 2025.[iv] Layered on top of the existing Swift network, it aims to uplift the user experience by standardising how banks around the world process international payments for consumers and SMEs. The scheme provides users with certainty on cost, full-value delivery without deductions, end-to-end transparency and tracking as well as the fastest possible processing speeds – including instant settlement where the domestic technology allows – all underpinned by global standards and ISO 20022-aligned formats.

Marianne Demarchi, Chief Executive, Europe, at Swift, explained: “Our focus is on enabling our community to provide the best possible cross-border payments experience to their end customers. We’ve been working to drive the industry towards the G20’s goals for consumer cross-border payments, but we know that – while the in-flight leg is fast, often completing in seconds – payments are often delayed in the last mile, between arriving at the end bank and being credited to the customer. This is where the average transaction spends 80% of its total journey time, largely due to legacy infrastructures operating in batches and within limited hours. OCT Inst and Swift’s scheme are complementary, and together will help European citizens enjoy a faster and better experience for both inbound and outbound payments, with the reciprocity enabled by other instant payments systems that are able to process cross-border payments.”

And it is on this last mile where OCT Inst could make a tangible difference. As Frantz Teissèdre, Head of Public Affairs – Cash Clearing Services at Société Générale, put it: “The OCT Inst scheme can play a critical role in addressing the last mile of cross-border payments to Europe, the final stage where funds are delivered to beneficiaries within SEPA. By enabling near-instant settlement for inbound payments 24/7, OCT Inst ensures that funds are credited to beneficiaries as soon as they arrive in Europe, which significantly improves the experience for both payers and payees.”  

At the same time, the Swift framework introduces essential features for modern cross-border payments, including unique end-to-end transaction identifiers, enhanced tracking capabilities and the incorporation of CBPR+ standards. By aligning the global payments community around a common baseline, the Swift scheme fosters interoperability and seamless end-to-end processing for cross-border payments globally, involving an OCT Inst leg for those destined for Europe.

Industry participants widely recognise this alignment.  Damien Godderis, Head of Payments Industry Engagement Cash Management at BNP Paribas and Chairman of the EPC OLO Strategy Advisory Group, said: “The Swift scheme and OCT Inst are fully complementary. As one-leg-out schemes proliferate globally, the need for a unified baseline becomes critical. This is where Swift’s role is pivotal – driving global harmonisation and enabling a smoother, more integrated cross-border payments ecosystem”.

 

Getting started

As an optional scheme, OCT Inst will require strong industry collaboration to achieve scale, with success dependent on investment, expanded reach and aligned service levels across both legs of a transaction. Yet the real barrier may prove simpler: getting started.

For many institutions, the path does not need to be complex. A receiver-only model offers a pragmatic entry point by enabling banks to become reachable quickly while laying the groundwork for broader participation down the road.

What matters most is momentum. Engaging payments product and infrastructure teams early will be key to securing buy-in and defining a clear strategy.

The crux is this: what might appear no more than a ‘nice to have’ today will quickly become a competitive differentiator. Banks that can deliver a consistent experience across domestic and cross-border payments will be best placed to compete in tomorrow’s increasingly demanding cross-border payments market.

 

[i] https://www.europeanpaymentscouncil.eu/document-library/other/epc-letter-mis-use-sepa-credit-transfer-schemes-international-credit

[i] https://www.iberpay.com/en/news/iberpay-news/santander-and-iberpay-launch-the-first-international-instant-transfers

[i] https://flow.db.com/files/documents/more/publications/flow-briefing/flow-briefing-Unlocking-instant-cross-border-payments.pdf

[ii] Federal Reserve Board – Federal Reserve Board invites public comment on proposal that would allow U.S. banks and credit unions to use intermediaries to transfer funds through the FedNow Service

[iii] https://www.fxcintel.com/research/reports/ct-real-time-payments-clearing-house-aci-worldwide

[iv] https://www.swift.com/news-events/press-releases/swift-set-new-rules-retail-cross-border-payments-its-network-bold-move-further-ramp-speed-and-predictability