The European Parliament has voted to adopt a new set of rules that ensure transferred funds arrive immediately into the bank accounts of retail customers and businesses across the EU.
The new regulation updates the current Single Euro Payment Area (SEPA) rules, thereby ensuring that instant euro money credit transfers arrive into the recipient’s account within 10 seconds.
The payer should also be informed within 10 seconds of whether or not the funds transferred by the bank or payment service provider (PSP) have been made available to the intended recipient.
PSPs in the Euro area have nine months to be ready to receive instant credit transfers in euros and 18 months to send them.
Lead MEP Michiel Hoogeveen said: “The Instant Payments Regulation marks the long-awaited modernisation of payments in the European single market.
“Customers can now say goodbye to the inconvenience of waiting two or three working days to access their money. We are delivering on something that people and businesses truly care about: transferring money within 10 seconds at any time of the day.”
The text has been adopted with 599 votes to seven, and 35 abstentions.
Lisa Gutu, vice president of sales in Europe at Yapily, wrote on LinkedIn that the decision provides an Open Banking boost.
“This mandate acts as a significant boost for Open Banking adoption. With faster and more affordable instant payments readily available, it encourages innovation and development of new financial services built on Open Banking principles,” Gutu wrote.
MEPs have agreed that PSPs should not charge higher fees for instant payments.
Gutu wrote: “The regulation mandates that costs for instant payments cannot exceed those of standard credit card transactions. This potentially eliminates current fees ranging from 0.50 EUR to 4% per transaction in some EU countries/banks, leading to greater affordability and accessibility for all parties involved.”
The Parliament has also established a number of steps to ensure consumer safety, including up-to-date fraud detection and verification of a recipient’s identity.