The European Council and European Parliament have reached a provisional agreement regarding the mandatory provision of instant credit transfers in euros, along with granting non-bank e-money institutions and stablecoin issuers access to central bank payment rails.
Under the proposed regulations, payment service providers, including banks, must not only offer standard euro credit transfers but also facilitate sending and receiving instant payments in euros at no additional cost.
The agreement also allows non-bank payment institutions, like e-money firms and regulated stablecoin issuers, direct access to central bank payment systems. MEP Michieel Hoogeveen commented, “The EU payment systems overall will become more competitive. The Parliament negotiating team ensured that, under specific conditions, fintech companies will have direct access to the European Central Bank’s payment infrastructure, eliminating the need to pay banks for this service.”
According to a joint statement from the Council and Parliament, these new rules aim to enhance the strategic autonomy of the European economic and financial sector by reducing excessive reliance on third-country financial institutions and infrastructures.
This initiative will not only make instant euro payments universally accessible and affordable but also foster increased trust among users by mandating providers to verify the alignment between the IBAN and the beneficiary’s name supplied by the payer.
The implementation of these regulations will occur in two stages, featuring a shorter transition period for the euro area and a longer one for EEA countries.
Kjeld Herreman, head of strategy advisory at RedCompass Labs, noted, “While this legislation is promising for European consumers and businesses, the technical implementation poses significant challenges for banks. They will need to quickly evaluate their digital capabilities and collaborate with their partners and service providers to tackle these issues within a tight timeframe.”
He added, “The timelines for this transition are extremely ambitious. Banks must also facilitate file-based instant payments without surcharge for their business clients, which will require payment service providers, even those already equipped for instant payments, to significantly enhance their processing capacity.”