Unlocking Cross-Border Payment Opportunity: Why EPC’s OCT Inst Scheme Matters

By Anuradha Raman, Senior Product Manager - Payment Schemes at European Payments Council

Have you wondered why cross border payments lag behind their domestic counterparts? While instant payments have redefined customer expectations within Europe, international payment transactions are still slower, less transparent, expensive and operationally more complex. The European Payments Council’s (EPC) One-Leg Out Instant Credit Transfer (OCT Inst) scheme is a direct response to that imbalance - and, importantly, a practical one.

OCT Inst builds on the principles of the widespread European SEPA Instant Credit Transfer (SCT Inst) scheme and extends them beyond Europe. It allows euro leg payment service providers (PSPs) to rely on existing SEPA instant payment rails, while also enabling connectivity with non-euro payment systems globally when available. In doing so, it bridges a long-standing gap: enabling cross-border transactions to be executed in seconds like a domestic transfer rather than in days.

For PSP communities, including smaller and medium-sized PSPs, this offers an opportunity to participate more meaningfully in cross-border payments, broadening access to capabilities that were previously concentrated among larger institutions.

A more level playing field

Cross-border payment innovation has often been seen as the domain of large banks with extensive correspondent banking networking requirements. The OCT Inst scheme changes this perception. It combines the reach of traditional cross-border payment models with the speed and efficiency characteristic of the SCT Inst scheme.

What makes this particularly relevant is accessibility. The OCT Inst scheme adoption does not require a complete infrastructure overhaul. For institutions already participating in SCT Inst, implementation appears to be a marginal step.

Feedback from the Spanish PSP community, where OCT Inst participation is already widespread, indicates that the required infrastructure investment would be lower than those associated with the initial SCT Inst set up. At the same time, PSPs would be able to build on the operational capabilities and expertise developed through their existing scheme participation.

This matters. In a landscape where resources are finite and priorities are often driven by regulation, a solution that delivers cross-border payment capabilities without disproportionate cost is both rare and valuable. OCT Inst effectively lowers the barrier to entry, allowing also smaller PSPs to offer an attractive cross-border payment service.

Borders are disappearing. Customer expectations aren't.

One of the clearest shifts in payments is that expectations are now universal. Whether a multinational treasury team, a small business, or an individual sending funds abroad, the requirements are the same: cost-effective, speed, transparency, and certainty.

OCT Inst aligns closely with these expectations. It enables near-instant execution, offers improved traceability of transactions, and provides greater clarity on fees and intermediaries.

From a PSP perspective, this is not just about technology - it is about relevance. Customers don't see borders, they see payments, whether a transaction is domestic or cross-border, they expect the same speed, transparency, and ease of use. Consistency across both has become a baseline requirement.

Evolution, not disruption

A defining strength of the EPC’s OCT Inst scheme is that it is evolutionary rather than disruptive. It builds on existing SEPA instant payment rails and retains elements of familiar cross-border payment models, including the flexibility of bilateral agreements.

For smaller PSPs, this is critical. The scheme does not force a departure from established business models. Instead, it enhances them -  increasing speed, efficiency and transparency at a lower transaction processing cost while preserving commercial flexibility.

At the same time, OCT Inst reduces some of the structural burdens associated with traditional cross-border payments. By leveraging instant payment infrastructure, PSPs can better manage liquidity and reduce reliance on complex correspondent banking arrangements.

In practical terms, this creates a more efficient operating model without introducing unnecessary disruption.

Built with global market requirements in mind

The regulatory environment for PSPs is becoming more demanding and more aligned globally. Initiatives such as the G20 Roadmap for Enhancing Cross-Border Payments have set clear expectations around speed, cost, transparency and access in cross-border payments.

The EPC has designed OCT Inst with this trajectory firmly in mind. The scheme is based on the 2019 version of the ISO 20022 messaging standard and is aligned with the Cross Border Payments and Reporting Plus (CBPR+) and Instant Payments Plus (IP+) guidelines. This enables the structured and data-rich transfers required for compliance.

For smaller PSPs, this alignment is particularly valuable. It means that adopting OCT Inst is not an additional compliance burden but a way to address multiple global market requirements within a single framework. That efficiency should not be underestimated.

A necessary step in a rapidly evolving market

The payments landscape is evolving at pace. New technologies, from distributed ledger solutions to digital currencies, are challenging traditional payment models. At the same time, fintechs continue to raise the bar for speed and transparency in cross-border payment services.

In this context, the added value of OCT Inst is clear. It offers PSPs of all sizes a pragmatic path forward - one that leverages existing infrastructure while enabling them to meet

modern customer expectations.

There is also a strategic dimension to consider. Delayed adoption carries risk. As alternative models gain traction, institutions that have not modernised their cross-border payment capabilities may find themselves at a disadvantage. The window to act is not indefinite.

From opportunity to adoption

In spite of its strengths, the adoption of OCT Inst has been gradual so far. This is perhaps not surprising given it is currently an optional scheme for PSPs. Voluntary schemes often struggle for prioritisation when PSPs must balance multiple regulatory and operational demands.

Yet the case for OCT Inst scheme adoption is increasingly difficult to ignore. The EPC has created this scheme that is not only technically sound but also commercially and operationally accessible.

For smaller PSPs in particular, it  represents a tangible opportunity to expand capabilities, improve customer experience and compete more effectively.

Ultimately, OCT Inst is not about reinventing cross-border payments overnight. It is about making meaningful, achievable progress - using infrastructure that PSPs already understand and use. For organisations looking to stay relevant in a rapidly evolving payments landscape that may be exactly what is needed.