Instant Euro payments set to transform European financial landscape


In a landmark move set to redefine financial transactions within the EU and the EEA, the Council has adopted regulations to facilitate instant payments in Euro.

This groundbreaking regulation is poised to significantly enhance the strategic autonomy of the European economic and financial sectors by mitigating the dependency on financial institutions and infrastructures based in third countries.

The essence of this regulation lies in its ability to enable instant money transfers across the EU, allowing both consumers and businesses to send and receive payments in euro within a mere ten seconds, at any time of the day, including outside of standard business hours. This innovation is not limited to intra-country transactions but extends across borders to other EU member states, acknowledging the specific needs of non-euro area entities.

A pivotal aspect of this regulation is its inclusivity; payment service providers, particularly banks offering standard credit transfers in euro, are mandated to provide the capability for instant payments at charges that do not exceed those applicable to conventional credit transfers. This initiative ensures that the benefits of instant payments are accessible without imposing additional financial burdens on users.

Moreover, the regulation introduces a transitional period, accommodating the varying preparedness levels across the euro and non-euro areas. It also extends the obligation of facilitating instant credit transfers to payment and e-money institutions (PIEMIs), thereby broadening the scope of service providers. To safeguard the financial ecosystem, the regulation includes provisions to ensure that the integration of PIEMIs into payment systems does not introduce additional risks.

A novel requirement under the new rules is the verification of the recipient’s International Bank Account Number (IBAN) and name, a measure designed to pre-empt potential errors or fraudulent activities before the completion of a transaction. This verification process will be a standard practice for both instant and regular transfers, enhancing the security and reliability of transactions.

The regulation also mandates a review clause, requiring the European Commission to evaluate the impact of the regulation on credit charges and present a report on its findings.

This initiative is part of the broader capital markets union project, aimed at unifying capital markets across the EU to stimulate investment flows and benefit citizens, businesses, and investors alike. The adoption of the instant payments regulation marks a significant milestone in the EU’s journey towards financial integration and innovation, promising to usher in a new era of efficiency and security in financial transactions.

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