European Parliament agrees new rules on ‘affordable’ instant transfers in euros

Ellie Duncan
09 Nov 2023

The European Parliament has reached an agreement requiring EU banks to provide instant payments at no extra cost, making euro instant transfers more affordable and available to consumers and businesses across the EU.

The new rules secure the immediate arrival of transferred funds to bank accounts of both retail customers and businesses in the EU, following a deal struck between European Parliament negotiators and the Spanish presidency.

The agreement updates the Single Euro Payments Area (SEPA) legislation to oblige payment service providers (PSPs), such as banks, that provide transfer services in euros, to offer instant credit transfers.

According to the European Parliament, an instant credit transfer is supposed to be executed “regardless of the day or hour” and immediately processed, so that the payee’s payment account is credited with the amount transferred within 10 seconds after receipt of the payment order. Within 10 seconds, the payer should also be informed about whether the transferred funds have been made available to the payee.

Negotiators also agreed that PSPs should have “robust and up-to-date” fraud detection and prevention measures in place, to prevent a credit transfer being sent to an unintended payee as a result of fraud or error.

PSPs operating in the EU are expected to immediately, and without any additional charges or fees, provide a service to verify the identity of the payee to whom the payer intends to send a credit transfer.

Under the new rules, PSPs will have to compensate clients for any financial damage in instances where they fail to notify a client of a discrepancy between the payment account identifier of the payee and the name of the payee provided by the payer.

Member states whose currency is not the euro will also have to apply the rules, where the accounts already offer regular transactions in euros, but will be given a longer transition period to comply.

Michiel Hoogeveen, the lead MEP, said: “With this initiative, EU banks are obliged to provide instant payment services to clients, at no extra cost, under strict deadlines.

“Customers will enjoy smoother payment options, businesses will face lower costs, and the EU payments systems as a whole will become more competitive.”

Hoogeveen added: “The Parliament negotiating team also secured that, under certain conditions, fintech companies will be granted direct access to the European Central Bank’s payment infrastructure, so they won’t have to pay banks anymore to do it for them.”

Charges applied by a PSP on payers and payees in respect of instant credit transfer transactions in euros cannot be higher than the charges applied to credit transfer transactions in euros, the European Parliament stated.

The provisional agreement will have to be approved by the Economic and Monetary Affairs Committee, followed by a plenary vote, and the Council also has to approve the deal before it can come into force.