The EU Council has, on 26 February 2024, given the green light for the proposed regulation for instant payments in the single market. This regulation is part of the broader context of completing the capital markets union, and will enter into force 20 days after its publication in the Official Journal of the European Union.
The proposed regulation is based on a number of factors, which may have an impact on payment service providers' business models, namely:
- allowing people to transfer money within ten seconds at any time of the day, including outside business hours, not only within the same country but also to another EU member state, with particular consideration also given to non-euro area entities;
- payment service providers such as banks, which provide standard credit transfers in euro, will be required to offer the service of sending and receiving instant payments in Euro;
- Any applicable charges must not be higher than the charges that apply for standard credit transfers;
- providers of instant payment will need to verify that the beneficiary's IBAN and name match in order to alert the payer to possible mistakes or fraud before a transaction is made; and
- granting access for payment service providers and electronic money institutions to payment systems, imposing an obligation to offer the service of sending and receiving instant credit transfers.
The new rules will come into force after a transition period that will be faster in the euro area and longer in the non-euro area, that needs more time to adjust.
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