OCT Inst explained: What the scheme means for financial institutions

OCT Inst explained (Part 1 of 4): What the scheme means for financial institutions

Abstract

The One-Leg Out Instant Credit Transfer Scheme (OCT Inst) is a European initiative for cross-border instant payments, where at least one payment leg is denominated in euro and processed through the SCT Inst infrastructure. The scheme has been live since November 2023; participation is open to PSPs within the SEPA area that offer credit transfer services, on a voluntary basis. Spanish PSPs have driven adoption so far, with the entire Spanish banking community connected to OCT Inst via Iberpay since November 2024.

Why the scheme matters

Speed has become a baseline expectation in payments, not merely a differentiator. The SEPA Instant Credit Transfer scheme (SCT Inst), introduced in 2017, set that reference point for the Eurozone: its share of SEPA Credit Transfer (SCT) transaction volumes has grown steadily across all euro area countries since launch (see Figure 1) (European Central Bank [ECB], n.d.). This reflects growing adoption among payment service providers, businesses, and consumers.

The percentage of SCT Inst in all SEPA Credit Transfer transactions:

Cross-border payments have not kept pace with this shift. The following section examines how close the industry has come to delivering a comparable experience for international transactions.

Cross-Border Payments today

Until the early 2010s, cross-border payments were generally slower, more expensive, and less transparent than domestic payments. Their execution often relied on complex correspondent banking networks, involving multiple intermediaries and settlement delays of several business days (Bank for International Settlements [BIS], 2019). Today, consumers routinely purchase goods and services from merchants around the world, freelancers work for international clients, and businesses of all sizes participate in global supply chains.

In 2020, the G20 endorsed the Cross-Border Payments Roadmap, which aims to address the high costs, low speed, limited access, and insufficient transparency in the cross-border payments market (Financial Stability Board, 2025). Its objectives continue to guide efforts by central banks, regulators, and the private sector to modernize global payment infrastructures, and Europe is part of that effort.

By 2026, international payments are generally more accessible, faster, and less expensive than a decade ago. Cross-border instant payments, however, are not yet the norm (Garratt et al., 2024). Many non-bank PSPs offer what they market as „instant“ international payments, but the underlying transactions can still involve high costs, limited transparency, and lengthy processing times – particularly when parties beyond the payer’s and payee’s banks are involved in the payment chain.

Europe’s „One-Leg Out“ approach

The term „One-Leg Out“ describes a transaction in which at least one leg is denominated in euro. The One-Leg Out Instant Credit Transfer Scheme (OCT Inst) is an initiative of the European Payments Council (EPC) aligned with the G20 strategy. Its goal is to use the existing SCT Inst infrastructure to make the European leg of cross-border transactions instant (European Payments Council [EPC], n.d.).

Note: The Sender’s (Payer’s) PSP and the Euro Exit PSP can be the same institution. The transaction chain depends on the correspondent banking structure between the Payer’s and Payee’s PSPs.

Participation in the scheme

All PSPs licensed within the SEPA geographical scope – not just the euro area – and authorized to provide credit transfer services are eligible to participate in OCT Inst. This includes banks, certain electronic money institutions (EMIs), and payment institutions (PIs). At minimum, a participant must act as the payee’s PSP, i.e., commit to receiving OCT Inst payments. Where a participant relies on service providers to support its OCT Inst services, those providers must also comply with the applicable requirements of the Scheme Rulebook.

The scheme has been live since November 2023; adoption has been voluntary and, so far, limited. As of September 2026, the scheme counts 98 participants: 92 from Spain, three from Andorra, and one each from Luxembourg and the United Kingdom, with Cyprus scheduled to join in November 2026 (European Payments Council [EPC], 2026).

Spain has emerged as the clear frontrunner in implementing the scheme. Since November 2024, the entire Spanish banking community has been live on OCT Inst, enabled by the common infrastructure that Iberpay provides (Euro Banking Association [EBA], 2025).

According to EBA Clearing, which is ready to support OCT Inst payments, ten multinational banks have committed to adopting the scheme’s standards by 2027 (EBA Clearing, 2024; EBA Clearing, 2025). These ten banks form a „frontrunner“ group developing a practical roadmap for OCT Inst adoption to support others in implementation; the group remains open to further participants.

What are the key benefits of OCT Inst?

Faster international payments

OCT Inst increases the speed of international payments. At least one leg of the transaction must be in euro – either the sending or the receiving leg. This means OCT Inst can be used even when both legs are in euro, for example when sending euro from a French account to a euro account in the US. The speed of the non-euro (non-SEPA) leg still depends on the local infrastructure it runs on, so it will not necessarily be instant.

Greater cost transparency

OCT Inst is designed to give payers and payees better visibility into costs for all parties involved, both inside and outside the euro leg.

Improved traceability

The scheme also provides clearer traceability of payment status, for instance through the optional use of the Unique End-to-End Transaction Reference (UETR).

Standardized exception and request handling

OCT Inst sets itself apart from other schemes through predictable, largely automated handling of exceptions, and through standardized processing of payment requests and investigations for the euro leg.

Conclusion 

OCT Inst provides a pragmatic step toward faster, more transparent, and more standardized cross-border payments. By leveraging SCT Inst for the euro leg, it helps bridge Europe’s instant payment infrastructure with international payment flows. Adoption is still emerging, but Spain’s full market participation and the commitment of ten multinational banks point to growing momentum. For financial institutions and PSPs, OCT Inst is therefore a development worth tracking and assessing strategically.