The EU swiftly agrees on instant payments, enabling transfers in seconds and promoting strategic independence in the European economic sector.
In relation to the instant payments proposal, which aims to increase the availability of quick payment options in euros to consumers and businesses in the EU and in EEA countries, the Council of the European Union (EU) and the European Parliament have reached a political agreement.
Instant payments allow users to send money to another member state of the European Union or inside the same country in less than ten seconds, including on weekends and after work hours.
The implementation of the new immediate payment regulations is expected to enhance the economic and financial sector’s strategic independence in Europe by mitigating the over-reliance on financial institutions and infrastructures in third countries.
Payment service providers (PSPs), including banks, who already offer conventional credit transfers in euros, would also have to give the ability to send and receive instantaneous payments in euros as per the provisionally agreed standards.
The Council and Parliament agreed that the new laws will take effect after a transition period that will be shorter in the euro area and longer in the non-euro area, allowing greater adjustment time. This preliminary agreement includes non-euro area firms.
PIEMIs were granted access to payment systems by the co-legislators by amending the settlement finality directive (SFD). Thus, after a transition, these organisations must make and receive rapid credit transfers.
Appropriate protections have been introduced by the Council and Parliament to guarantee that PIEMIs’ access to payment systems won’t put the system at further danger.
By law, instant payment providers must verify the beneficiary’s name and IBAN before completing a transaction to alert the payer of any inaccuracies or fraud. This restriction applies to regular transfers too.
“A very significant legal document”
“It is a very important piece of legislation, not only in terms of the integration of European financial markets, but most importantly because of the impact for European companies and citizens who will be able to make instant payments throughout the whole EU with devices and mechanisms similar to the ones existing already in some Member States,” stated Nadia Calviño, Vice President of the Government and Minister of Economy for Spain, in response to questions about the new agreement governing instant payments.
“In the case of Spain, for instance, Bizum facilitated cross-border payments, resulting in a more integrated retail financial market within the EU and an efficient financial sector within the EU.”
The European Commission put up new rules on instantaneous credit transfers in euros on October 26, 2022. By including special rules for immediate credit transfers in euros, it updates and modifies the Single Euro Payments Area (SEPA) regulation of 2012 on standard credit transfers in euros.
