The Council adopted a regulation today that will make instant payments fully available in euro to consumers and businesses in the EU and in EEA countries. The new rules aim to improve the strategic autonomy of the European economic and financial sector by reducing reliance on third-country financial institutions and infrastructures. This move is expected to enhance the possibilities to mobilize cash-flows, benefiting citizens and companies, and paving the way for innovative added value services.
The instant payments regulation will enable people to transfer money within ten seconds at any time of the day, including outside business hours, not only within the same country but also to another EU member state. The regulation takes into account the particularities of non-euro area entities.
Payment service providers such as banks, which provide standard credit transfers in euro, will be required to offer the service of sending and receiving instant payments in euro. Any charges that apply must not exceed those for standard credit transfers.
The new rules will come into force after a transition period, which will be shorter in the euro area and longer in the non-euro area, which needs more time to adjust.
The regulation grants access for payment and e-money institutions (PIEMIs) to payment systems, by amending the settlement finality Directive (SFD). Consequently, these entities will be obliged to offer the service of sending and receiving instant credit transfers, after a transitional period. The regulation includes safeguards to ensure that the access of PIEMIs to payment systems does not pose additional risk to the system.
Under the new rules, instant payment providers will need to verify that the beneficiary’s IBAN and name match to alert the payer to possible mistakes or fraud before a transaction is made. This requirement will also apply to regular transfers.
The regulation includes a review clause requiring the Commission to present a report evaluating the development of credit charges.
This initiative is part of the completion of the capital markets union, the EU’s initiative to create a truly single market for capital across the EU. It aims to get investment and savings flowing across all member states for the benefit of citizens, businesses, and investors.
On 26 October 2022, the Commission proposed an amendment to the single euro payments area (SEPA) regulation of 2012 on standard credit transfers in euro, adding specific provisions for instant credit transfers in euro.
