The European Commission has adopted a legislative proposal to make instant payments in euros available to all citizens and businesses with a bank account in the EU and the EEA countries. The proposal aims to ensure that euro instant payments are accessible, secure and processed unhindered throughout the EU.
Instant payments allow citizens to transfer money anytime any day in ten seconds. A much faster time frame than for traditional credit transfers, which are received by payment service providers only during office hours and credited to the beneficiary’s account only by the following working day, taking up to three calendar days. Instant payments are a much faster and more convenient solution for consumers, for example to pay bills or receive urgent transfers (such as in the case of a medical emergency). They also contribute to a significant improvement in cash flow and ensure cost savings for businesses, in particular SMEs, including retailers. Instant payments release the money that remains stuck in the financial system during transactions, the so-called floating payment, amounting to almost 200 billion euros every day, which can then be used immediately for consumption or investment purposes.
The proposal, which amends and updates the 2012 Single Euro Payments Area (SEPA) Regulation, consists of four obligations relating to euro instant payments:
- make instant euro payments universally available, by requiring EU payment service providers that already offer euro credit transfers to also offer the instant version within a certain period of time;
- make instant payments in euros accessible by requiring payment service providers not to charge a higher price for instant payments in euro than for traditional non-instant transfers in euros;
- increase confidence in instant payments by requiring lenders to verify the correspondence between the bank account number (Iban) and the name of the payee indicated by the payer in order to warn the payee of any error or fraud before payment is made;
- remove bottlenecks in the processing of euro instant payments, while preserving the effective screening of persons subject to EU sanctions, through a process whereby payment service providers verify, at least daily, customers compared to the EU sanctions lists, instead of examining all transactions one by one.