With the introduction of the One Leg Out (OLO) Instant Credit Transfer scheme (OCT Inst), the euro leg of cross-border payments can now be processed in real time between the Single Euro Payments Area (SEPA) and non-SEPA jurisdictions.
While OLO Inst speeds up transactions, banks face increased operational pressure facilitating this change, with little room for error. Those seeking to reap the benefits of the scheme will have to navigate risk controls, compliance checks, and customer expectations – all at once, and fast.
Why OLO matters
Cross-border euro payments traditionally relied on chains of correspondent banks and multiple clearing systems. Each institution did its own thing – translating messages, running compliance checks, coordinating settlement. If something went wrong, finding out why could take days.
Over time, it became clear this model was no longer sustainable. Businesses and customers began to expect cross-border payments to move with the same speed and certainty as domestic transactions. Waiting days for transactions to be processed was no longer an option.
The One-Leg-Out Instant Credit Transfer scheme from the European Payments Council was introduced to address this. It enables faster processing across SEPA, letting money move across borders quicker than ever. But speed changes the rules: once a payment enters SEPA Instant, it must be processed within seconds, or it will be rejected.
Speed meets scrutiny
With this speed comes new challenges. Every payment check, including Anti-Money Laundering (AML) screening, sanctions, and beneficiary verification via schemes like Confirmation of Payee in the UK or Verification of Payee across Europe, must be completed almost instantly. Even minor mismatches can cause a payment to fail.
Banks relying on legacy systems will feel the pressure. Many have used translation tools to bridge legacy systems with modern payment networks. These tools can convert messages to allow different systems to communicate with each other, but they don’t coordinate the broader payment process. Each compliance and validation step is handled in separate systems, creating gaps where delays, errors, or outright rejections can occur – right when speed matters most.
The impact isn’t just operational. Failed or delayed OLO payments will frustrate customers and undermine trust, affecting business cash flow and everyday transactions.
Seamless orchestration for reliable payments
Think of OLO payments like a cross-border train journey from London to France. The tracks exist, and the train can run quickly, but passengers still need passports and tickets to complete the trip. Similarly, even with OLO standards in place, banks must still perform AML checks, sanctions screening, and verification before funds can move. All steps must be orchestrated efficiently to ensure the transaction reaches its destination reliably.
Aquila, Aqua Global’s cloud-native messaging hub, acts as that coordination layer – a first-class, end-to-end travel service rather than just a ticket. It orchestrates the journey, integrating compliance and validation services into a single workflow, so all steps can be managed in one portal. This keeps payments moving efficiently through SEPA.
- Automated pre-payment checks – AML, sanctions, and beneficiary verification happen automatically before the payment enters SEPA. Direct API connections to screening providers embed checks into the transaction rather than managing them separately.
- Message transformation and standardisation – Because Aquila supports ISO 20022, payments can be handled natively in the format required for SEPA schemes – avoiding the need for complex translation and helping ensure consistent, reliable processing.
- Real-time monitoring and auditability – Banks gain instant visibility into payment status, confirmations, exceptions, and all validations, captured in a structured, auditable trail.
- Exception handling before SEPA – Payments that trigger exceptions are routed through predefined workflows, resolving issues before reaching SEPA and preventing costly rejections.
- End-to-end orchestration and governance – Compliance, message transformation, settlement, and exception handling are coordinated in one platform. Escalation rules and dual authorisation paths ensure secure, compliant, and reliable payment processing.
Next-level cross-border payments
OLO isn’t just a box to tick – it’s a chance to rethink how cross-border euro payments move. Banks that integrate automated workflows, compliance, and real-time monitoring into their payment architecture can turn near-instant payments into a competitive edge. They can cut errors, prevent delays, and keep up with increasing customer demand for seamless, quick transaction experiences.
