The European Commission has presented a proposal to make euro payments to and from citizens and businesses in Europe faster, but at the same time more convenient, safer and without any obstacles. With Instant Payments you can transfer money at any time of the day in 10 seconds – explain the experts from Brussels -. much faster than traditional transfers. The EU intends to amend and update the regulation introduced in 2012 (Sepa, Single Euro Payments Area) and make instant money transactions widely available and at the same price as traditional transfers.
The EU proposal
Until now, if a transfer was made in the countries of the European Union late in the afternoon on a Friday, the recipient will receive it on Tuesday of the following week. With the system the European Commission plans to propose, a transfer leaving at 7pm (any day) will arrive a minute later. At the beginning of 2022, only 11% of money transfers to the EU were instant transfers. They dramatically increase speed, contribute to a significant improvement in cash flow and lead to cost savings for companies, especially SMEs, including traders, explain again from Brussels. In addition, they are currently releasing money blocked in the financial system on the way, the so-called “payment float”, which can initially be used for consumption or investments (almost 200 billion euros are blocked per day).
The 4 requirements
Based on the basic assumption that a current account is required for an immediate payment, the European Commission’s proposal is based on four requirements. The first is to make instant euro payments widely available, with EU payment service providers already offering euro transfers being obliged to also offer their instant version within a set period of time, the Commission said. The second is to make euro instant payments accessible, whereby payment service providers are obliged to ensure that the price charged for euro instant payments does not exceed the price charged for traditional euro instant payments. The third requirement is to increase confidence in instant payments, whereby suppliers are required to verify the match between the bank account number (Iban) and the payee name provided by the payer in order to alert the payer to a possible error or fraud before payment is made. Finally, the fourth removes the friction of processing instant payments in euros while preserving the effectiveness of screening individuals subject to EU sanctions, through a process whereby payment service providers check their customers against EU sanctions lists at least daily, instead of The European executive concludes that all transactions should be checked individually.
A significant step
The benefits are not just money or wallets, but create opportunities both in the areas of digital transition and innovation, as well as in industrial and employment terms, if we consider the need to create computer programs, algorithms and systems capable of supporting the new instant payment tool . They are quickly becoming the norm in many countries – said Valdis Dombrosvskis, Vice-President of the European Commission -. They should be accessible to everyone in Europe in order to remain globally competitive and make the most of the innovation opportunities of the digital age. People earn with more choice and convenience, businesses earn with better cash flow control and lower operating costs. Today’s proposal will strengthen our economy, make it more efficient and encourage its growth. Mairead McGuinness, Commissioner for Services and Financial Markets, also agrees, stating: The move from “next day” transfers to “10-second seismic” transfers is akin to moving from post to email. Nevertheless, today almost nine out of ten euro transfers are still processed as conventional “slow” transfers. There is no reason why many citizens and businesses in the EU are unable to send and receive money instantly, the technology that has enabled instant payments since 2017