Instant payments and sanctions screening: real-time compliance tips for fincrime teams

The EU’s Instant Payments Regulation (IPR) has changed the way financial institutions handle and screen different transaction types. Under rules that came into effect on January 9 2025, banks and payment service providers (PSPs) must be able to receive instant payments 24/7 that comply with all sanctions and anti-money laundering checks (and send them from 9th October 2025, according to the IPR timeline.)

Because of the nature of instant payments, financial institutions are expected to know immediately whether their customer is subject to any EU financial restrictions by re-screening their entire customer base at least once a day.

To help you stay IPR-compliant, we’ve pulled together four insights from industry practitioners. These tips are taken from a recent webinar where Lucy Heavens, VP of Marketing at Salv, Siiri Grabbi, Sanctions/CTF Officer at Coop Pank, and Anu Nael, Head of Client Operations at Salv, looked at the key issues and implications related IPR. To watch the discussion in full, head to YouTube.

Making sense of IPR requirements: work with reliable sanctions screening partners

The biggest challenge that financial institutions face with EU’s Instant Payment Regulation is the lack of total clarity on what’s expected. For instance, do you have to freeze payments if they come from sanctioned entities or do you simply need to send the payments back? “The regulators might understand it one way, and the European Commission might interpret it differently,” says Siiri. This is why it’s important to work with a trusted screening partner to stay on top of how the rules develop, she added.

Another wrinkle is that companies are expected to screen customer names ‘reasonably fast’ as soon as relevant sanctions are published or changed. But ‘reasonably fast’ is ambiguous because it could mean different things to different people—anything from a couple of hours to a few days. Salv Screening, for example, re-screens customer lists three times a day.

“For now, we think this approach is enough, but as the market evolves and the standards actually become clearer, then we are ready to step up things quickly if needed,” says Anu.

Data segmentation is key to auto clearing instant payments

To ensure instant payments clear smoothly, the first step is to properly segment customer data so financial institutions can apply automatic clearance rules.

If a company was to send only the name of a customer to their screening platform and that name was the same or similar as someone on the EU’s sanctions list, that transaction will be delayed, says Siiri.

By segmenting data to better understand a customer’s identity through information such as their date of birth and nationality, you can reduce the risk that instant payments will be held up.

“You have to do the segmentation and send the right information that would help you to create the clearance rules in your screening system,” says Siiri. “Instead of screening against everything and everyone in each and every payment, you should screen the right fields against the right things.”

This also means setting up different clearance rules for different payment types. While IPR requires pre-screening for SEPA instant payments, there are other types of transactions that may need to be screened against other sanctions lists, adding to the complexity.

Customer experience is paramount

While the new rules are intended to make instant payments safer and ensure banks and PSPs don’t process payments for sanctioned individuals, it could lead to negative customer experiences if financial institutions don’t have adequate sanctions screening protocols in place.

“If the compliance set up lacks accuracy or the tooling is bad, and there’s a high percentage of transactions triggering alerts that causes instant payments to be rejected, then this has a negative impact on the end user experience,” says Anu.

Choosing the right tech is pivotal to instant payments success

To reduce these challenges, you must ensure they have the right tools to handle instant payments while also being able to provide a clear audit trail to show compliance with IPR.

“You need a technology that is able to have different screening configurations, different lists, even different matching logic depending on the payment type or customer segment,” says Anu.

While there’s still a lack of understanding about what a good audit trail looks like under IPR, Salv’s technology ensures all changes are trackable across the system, Anu adds.

By investing in the right sanctions screening tools, EU banks and PSPs can ensure they are compliant with IPR without compromising their obligations to other sanctions regimes around the world.

To find out more about how Salv can help you manage real-time transactions screening in an increasingly regulated environment, get in touch with us for a chat today.