European Union and Parliament Reached an Agreement on New Instant Payment Rules
November 15, 2023
An agreement on the instant payments proposal has been reached between the Council of the European Union (EU) and the European Parliament. The proposal hopes to Improve the “Availability of instant payment options in euros to consumers and businesses in the EU and in EEA countries.”
It is expected that these new rules will help the European and Financial sectors retain their autonomy by reducing any “excessive” reliance on third-country financial infrastructures.
Under the new rules, when an individual needs to send or receive instant payments in euros, payment service providers such as banks will be required to offer this service. The rules will also apply to non-euro services, however, these rules will have a longer “transition period” for the non-euro area, as adjusting will take some time.
The co-legislators agreed to grant access for payment and e-money institutions (PIEMIs) to payment systems, by changing the settlement finality directive (SFD). As a result, these entities will be required to offer the service of sending and receiving instant credit transfers, after a transitional period.
In order to reduce any additional risk by this new access of PIEMIs to payment systems, the legislators have put some safeguards in place. Such as the need for instant payment providers to verify that the beneficiary’s IBAN and name match. This is all done in case it is needed to alert the payer of possible fraud or mistakes before the transaction is made. This rule will also affect regular transfers.
According to Vice President of the Government and Minister of Economy for Spain, Nadia Calviño, the new instant payments regulation agreement is a “very important piece of legislation.”
The co-legislators agreed to grant access for payment and e-money institutions (PIEMIs) to payment systems, by changing the settlement finality directive (SFD). As a result, these entities will be required to offer the service of sending and receiving instant credit transfers, after a transitional period.
Nadia added that this will make a positive impact not only on terms of integration but most importantly, the fact that both citizens and companies will benefit from being able to make instant payment transactions anywhere in the EU with equipment that they are familiar with.
As previously stated, these rules will take some transition time to be fully integrated. The transition time will be shorter for euro operations, and a bit longer for non-euro operations.
Want to learn more? Check out The Fintech Time’s full write-up here.
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