How to stay in control as SCT Inst limits disappear

Key points:

• Single European Payments Area (SEPA) Instant limits are changing. The €100,000 cap is being removed. Banks must now handle very large instant payments, 24/7.

• Limits must match across all channels. New rules require banks to sync SEPA Instant payment limits everywhere and let users set their own. Changes must be reflected immediately.

• A central limit repository could be the fix. It checks payments in real time, keeps limits in sync, and helps manage cash and fraud risk.

Think of SEPA Instant like a water supply.  

Until recently, the pipes only allowed 100,000 litres to flow through per payment. It was a controlled, manageable stream. But that cap is now being lifted.  

Soon, your customers will be able to send very large payments — potentially tens or hundreds of millions – instantly, 24/7. And that’s going to cause big problems.  

You’ll need enough cash in your instant payment account to fund the payments. You’ll need to update your channels with new limits immediately. And if you don’t, you’re going to upset your customers.  

So, what does this mean in practice? And what can you do about it?  

The floodgates are open

Without the €100,000 scheme cap, you need to understand how to manage your liquidity. But there are strict rules:  

• You can only set a bank-level (PSP) limit if you already have one for SEPA Credit Transfers. And it must match or be greater than the SCT limit. 
• Regardless of what you do, you must let your customers set their own daily or per-transaction limits at the customer or account level.  

That means you must provide the option, but your customers don’t have to use it. It’s up to them.  

That leaves you exposed.  

Let’s say you don’t have a limit set for SEPA Instant payments. What happens if 100 of your corporate customers send a €20 million SEPA Instant payment at 3am on a Sunday? You need to have enough cash in your TIPS account to fund it. Access to liquidity (like TARGET2) is closed until Monday, so you can’t top up if you run low.  

But how much is enough? €200 million? €600m? €1 billion? If you can’t fund the payments, the clearing and settlement mechanism will reject them. And that will upset your customers and the regulator.

Managing channels

The regulation states that daily or transaction-based limits for instant payments must “apply to all payment initiation channels”. And that any changes must happen immediately.  

In other words, you must keep limits consistent everywhere — across all corporate channels like mobile, web, and branches — and across all of a customer’s banking relationships. The same corporate customer may access your services through multiple channels and even multiple banks, so separate or inconsistent limits are not allowed.  

If each channel separately enforces limits, inconsistencies or timing gaps are likely.  

To see why, imagine one of your customers, Bob the Builder, is a large multinational with operations across Europe. Bob holds a single euro account with your bank — one shared reservoir — but accesses it through multiple taps: Channel A in Germany, Channel B in Belgium, and Channel C in Italy.  

Bob has full visibility across his European operations. But you, as a bank, can only see what’s happening in Bob’s account. 

That’s because Channel B and Channel A are separate vendors. They don’t talk to each other — and they’re not supposed to. It’s the bank’s job to manage this.  

So, you have a problem. A limit change in Channel A (Germany) might not be reflected in Channel B (Belgium) because you can’t see what’s happening in the ERP systems. You can only see what’s happening in your system.  

If the daily limit is reduced from €20 million to €5 million in Channel A (Germany) to manage companywide liquidity, the limit won’t update in Channel B (Belgium). That means a payment initiated in Belgium might exceed what’s set in Germany.  

That creates a risk. Liquidity can be drained faster than expected. Payments might be rejected. And your customer’s experience and confidence take a hit.  

Centralized Limit Repository

The question is: how do you get visibility?  

What’s the best way to maintain a single up-to-date limit?  

The simplest answer is to build a centralized service — a back-end layer that connects to all your payment channels in real time. It should power a shared user interface for setting limits and ensure consistent enforcement across every channel. 

This should hold and validate your customer’s instant payment limit. This helps you to keep both your and your customer’s liquidity in check by making sure limits are consistent across payment channels.  

So, if Bob the Builder initiates a €20 million payment in Belgium, it will call your central limit service to:  

• Display Bob’s current limit (€5 million – as set in Germany)  

• Perform an authorization or limit validation check for a requested payment amount.  

That way, Bob’s Belgian team can see that the limit has been reduced. They’re prevented from making the payment. 

Even with limits enforced at the back end, you should display the limit in real time on the frontend before a payment is initiated. This should be on every payment channel, so Bob knows what he’s allowed.  

You’ll need to set one of these up for every customer.  

Encourage your customers to set limits

Now, it’s in your best interest to get your customers to set a limit.  

If they don’t, you have less visibility over how much they’re planning to spend.  

So, use them to forecast liquidity.  

If Bob sets a limit of €50 million, you can use this – and historical SEPA credit and TARGET2 traffic – to forecast how much he is likely to spend. Then, do the same for the rest of your customers. You can use this to work out how much money you need in your TIPS account.  

If your customers don’t set a limit, you can still use their transaction history and their account balance to estimate how much you’ll need.   

Of course, limits can be changed instantly at any time. But this should give you a better idea.    

How can you provide a good customer experience?

There are five simple and very effective ways to provide a good experience for your customers:   

1. User-Friendly Interfaces

Provide clear, step-by-step limit-setting options within your digital banking environment (think: mobile app and internet banking). Remember, you are up against megabanks, neobanks, credit unions, fintechs, and PSPs. Make your experience stand out.  

Embed limit changes seamlessly into your customer journey. Avoid confusion. Make it simple. Intuitive. It must fit your brand, style, and voice. Go beyond the regulations. Look for best practice examples. This is your time to shine.  

2. Instant Limit Modification

Next, allow near real-time changes to the user’s instant payment limit. Remember: we are dealing with instant payments. The standard has shifted. Instant is the new normal.  

If Bob raises his limit from €5m to €50m – there’s a good chance she’s getting ready to make a transaction. Make sure limits are changed immediately so he can send it. If you don’t, he’ll get frustrated. And that’s bad for business.  

 You can mirror or even enhance the ease-of-use for standard SEPA transfers [Recital (19) IPR].  

3. Multi-Factor Authentication (MFA) for Limit Changes

This one really matters. Especially when a customer wants to raise their limit.  

Raising a limit opens the door to larger transactions, so it’s a prime target for fraud.   

To address fraud risks, you’ll want to double-check that the person changing the limit is who they claim to be. Use biometric, strong two-factor authentication, or similar whenever a customer appears to want to raise an existing limit significantly [Q&As on IPR implementation.md, theme on fraud prevention].  

Why? Well, let’s say a fraudster takes over Bob’s account. They plan to empty it. What’s the best way to maximise their payout?  

Raise the limit. Send an irrevocable instant payment. Make off with the money.  So, make sure there’s MFA for an extra layer of protection. It’s not going to catch everything. But it will certainly help.  

4. Transparent Notifications

And to reinforce your security, keep your customers updated on any changes.  

Send real-time SMS or push notifications to confirm both limit adjustments and high-value instant payments. This helps Bob quickly spot fraudulent or unintended updates.  

5. Education and Support

Finally, educate your customers. Not everyone will be aware they can customize their limits (maybe you didn’t realize either?).  

So, it’s up to you to explain to Bob how to set or change his limits quickly and securely. 
Offer short tutorials, customer guides, or FAQ sections explaining:  

• The difference between instant and non-instant transfers.  

• How to set daily vs. per-transaction limits.  

• Fraud awareness tips (e.g., never share login credentials).  

This will help to build a deeper relationship with your customers and mitigate your risk.  

Struggling with SCT Instant?

Speak to RedCompass Labs. We’ve been helping banks, big and small, get ready for the instant payments regulation. Please feel free to reach out to discuss anything you’re unsure of in the article. Or, anything SEPA related. We are always happy to help.