In a significant move towards enhancing the efficiency of financial transactions, the Council has approved a regulation today that will enable instant payments in euro for consumers and businesses across the EU and EEA countries.
This groundbreaking regulation marks a pivotal step in bolstering the strategic autonomy of the European economic and financial sector. By reducing reliance on third-country financial institutions and infrastructures, the new rules aim to fortify the EU's financial resilience.
One of the key benefits of the instant payments regulation is the swift transfer of funds within ten seconds, round the clock, throughout the year. This seamless transfer capability extends not only within the same country but also to other EU member states, fostering cross-border financial transactions.
Under the regulation, payment service providers, including banks, offering standard credit transfers in euro will be mandated to provide instant payment services. Importantly, the charges for instant payments must not exceed those applicable to standard credit transfers.
While the transition period will vary, with a shorter period in the euro area and a longer adjustment period in the non-euro area, the regulation will gradually come into effect.
Furthermore, the regulation introduces stringent verification requirements for instant payment providers, ensuring that the beneficiary's IBAN and name match to mitigate potential errors or fraudulent transactions.
Additionally, the regulation includes a review clause necessitating the Commission to assess the development of credit charges and present a comprehensive report.
This regulatory milestone aligns with the EU's broader objective of realizing the Capital Markets Union, aimed at fostering a unified market for capital across the EU. It builds upon the Commission's proposal on instant payments introduced on 26 October 2022, which sought to modernize and amend the Single Euro Payments Area (SEPA) regulation of 2012.
The adoption of the instant payments regulation signifies a transformative leap towards streamlining financial transactions, enhancing consumer convenience, and reinforcing the EU's financial autonomy. For more guidance on your businesses, contact EU Helpers.