The EP proposes more accessible instant payments in EUR

Following this announcement, the new rules are set to secure the immediate arrival of transferred funds to the bank accounts of retail clients and businesses in the European Union. 

The agreement is set to update the Single Euro Payments Area (SEPA) Legislation in order to make sure that retail customers and businesses, especially small and medium-sized enterprises (SMEs) will no longer need to wait for their money, while also being enabled to provide secure and fast transfers. Customers are set to benefit from more efficient payment options while businesses will be allowed to face lower costs, as the overall EU payments system is expected to become more competitive. 

More information on the partnership

Any member states whose currency is not EUR will also be required to apply the rules, where the accounts already offer regular transactions in EUR, after a longer transition period of time. According to the press release, there will be a special derogation for these types of accounts outside business hours, given possible concerns on the access to liquidity in EUR. 

An instant credit transfer is supposed to be executed securely, no matter the day or the hours in which they are initiated. In order for this process to take place, the client’s payment account is credited with the amount transferred within 10 seconds after the time of receipt of the payment order. At the same time, the payer should be informed whether or not the funds transferred have been made available to the payee in a secure and efficient manner. 

At the moment when a payment order for an instant credit transfer in EUR is submitted from a payment account that was not denominated in the currency, a PSP is set to convert the amount of transaction from the currency in which the transaction account is denominated into euro. This procedure should happen immediately upon receiving that payment order. 

The negotiators have agreed that the PSPs should have in place up-to-date fraud detection methods as well, developed in order to stop and prevent any credit transfer from being sent to an unintended payee as a result of fraud or any type of error. PSPs operating in the EU are expected to provide a solution to verify the identity of the payee to whom the credit transfer is made, in an immediate way, without any additional charges or fees.

In the case where a discrepancy is detected between the payment account identified or the customer and the name of the payee provider by the payer, the client should be notified or compensated by a PSP for any financial damage that could take place. As an additional management feature against threads, PSPs should also allow their users to set a maximum amount for instant credit transfers in EUR, which could be easily modified before the next transfer. 

At the same time, PSPs that offer instant credit transfers are required to verify whether any of their customers are subject to sanctions or other restrictive measures that are related to the prevention of money laundering or terrorist financing. 

Any additional charges applied by a PSP on payers and payees for the instant credit transfer transactions in EUR can’t be higher than the fees that are generally applied to credit transfer transactions in EUR. Under certain conditions, fintech companies will be granted the possibility to have direct access to the European Central Bank’s payment infrastructure in order to avoid the need for a third party. 

The political agreement needs to be approved by the Economic and Monetary Affairs Committee, followed by a plenary vote. In addition, the Council also needs to approve the deal, before it will come into force.