The European Commission adopted a legislative proposal on Wednesday aimed at enabling all citizens and businesses with bank accounts in EU and EEA countries to make instant payments in euros.

According to an EU executive press release cited by Agerpres, the aim of the proposal is to make instant payments in euros available, secure and processed without barriers across the EU.

Instant payments allow people to transfer money at any time of the day within ten seconds, much faster than traditional credit transfers, which are only received by payment service providers during business hours and do not reach the recipient’s account until the next business day, a process that can take up to three calendar days. Instant payments greatly increase speed and convenience for consumers, particularly when paying bills or receiving urgent transfers (for example, in the case of a medical emergency). In addition, they help to significantly improve cash flow and cost savings for businesses, especially small and medium-sized businesses, including retail.

Instant payments release money that is currently blocked at the processing level in the financial system, forming the so-called “amounts in transit”, and which can thus be used earlier for consumption or investment (almost 200 billion euros are blocked every day). However, at the start of 2022, only 11% of all euro credit transfers in the EU were instant.

“The transition from next-day transfers to ten-second transfers is a real revolution, which can be compared to the transition from postal correspondence to electronic correspondence. However, currently almost nine out of ten euro credit transfers are still processed as traditional “slow” transfers. The technology that enables instant payments has been around since 2017, so there’s no reason why many EU citizens and businesses can’t send and receive money instantly. Being able to send and receive money in seconds is even more important in this era when household and small and medium business accounts are growing and every cent counts. This initiative will bring direct benefits to EU citizens and businesses,” said Commissioner for Financial Services, Financial Stability and the Capital Markets Union Merid McGuinness.

The proposal, which amends and modernises the Single Euro Payments Area (SEPA) Regulation of 2012, includes four requirements for instant payments in euro:

– guaranteeing the general availability of instant payments in euro, payment service providers in the EU that already offer credit transfers in euro are obliged to offer their instant version within a specified period of time;

– a guarantee of affordable commissions for instant payments in euros, an obligation of payment service providers not to charge a higher commission for instant payments in euros than for traditional credit transfers in euros that are not made instantly;

– increasing trust in instant payments, the obligation of suppliers to check the consistency between the bank account number (IBAN) and the name of the beneficiary provided by the payer in order to warn the payer of a possible error or fraud before making the payment;

– removing obstacles to the processing of instant payments in euro, while maintaining the effectiveness of the screening of persons subject to EU sanctions, through a procedure whereby payment service providers will check their customers at least daily against EU sanctions lists, rather than checking each individual operation.