European governing organizations have reached a consensus on new regulations aimed at expanding instantaneous payment options for consumers and companies throughout the continent.
This week’s rules, which the European Council and the European Parliament agreed upon, will enable banks and payment service providers (PSPs) that presently offer standard credit transfers in euros to also begin offering instant payments—as long as they don’t charge more than the standard service does now.
As a result, users and companies would be able to transfer money to any account in any EU member state at any time of day, with the transaction settling in less than ten seconds.
E-money institutions (EMIs) and payment institutions (PIs), who will be granted access to payment systems through revisions to the settlement finality directive (SFD), would also be able to support instantaneous payments.
In order to safeguard the integrity and security of both regular and immediate payments, regulatory organizations have mandated that service providers implement a confirmation of payee feature, which requires that the beneficiary’s name and IBAN match for the transaction to be completed.
With this week’s agreement on the regulations, the European Union is getting closer to implementing a single, instantaneous payments system. The European Commission proposed the mandate’s draft in October 2022.
According to the council, the initiative intends to lessen “excessive reliance” on financial institutions and infrastructures in third countries while simultaneously enhancing the strategic autonomy of the European economic and financial sector.
It continues by saying that the regulations will enhance “the possibilities to mobilize cash-flows” and help create added-value offerings for the clients and companies scheduled to receive the service.
