The European Parliament has adopted new rules requiring that transferred funds reach the bank accounts of retail customers and businesses across the EU within ten seconds.
The new regulation, which received provisional agreement in November, aims to minimize wait times for retail clients and businesses, particularly SMEs, while also enhancing the safety of fund transfers. Banks and other payment service providers (PSPs) are mandated to ensure that credit transfers are affordable and processed instantaneously. This update to the existing Single Euro Payments Area (Sepa) rules has been previously agreed upon with EU member states.
According to the new rules, instant credit transfers must be executed regardless of day or time, with funds arriving in the recipient’s account within ten seconds. Additionally, the payer will be informed within the same time frame whether the funds have been made available to the intended recipient.
Member states using currencies other than the euro will also need to implement these rules, especially in accounts currently facilitating regular euro transactions, although a longer transition period will apply. A specific derogation allows for a delay in processing transfers outside of business hours to address possible liquidity concerns in euros.
To ensure transfer safety, PSPs must implement robust and up-to-date fraud detection and prevention measures to mitigate risks of erroneous or fraudulent transfers. Furthermore, PSPs operating in the EU are required to provide a service for verifying the identity of the recipient without any additional charges or fees.
In a bid to further protect against fraud, PSPs will allow clients to set a maximum amount for instant credit transfers in euros, which can be easily adjusted before the next transfer.
If a PSP fails to fulfill its fraud prevention responsibilities, resulting in financial loss, clients have the right to seek compensation from the service provider according to the new rules.
PSPs offering instant credit transfers must also check whether their clients are subject to sanctions or other controls related to money laundering and terrorist financing.
Additionally, fees charged by a PSP for instant credit transfer transactions in euros cannot exceed those for non-instant credit transfers in euros.
Lead MEP Michiel Hoogeveen (ECR, NL) stated, “The Instant Payments Regulation marks the long-awaited modernization of payments in the European single market. Customers can now say goodbye to the inconvenience of waiting two or three working days to access their money. We are delivering on something that people and businesses truly care about: transferring money within 10 seconds at any time of the day.”
The new regulations were adopted with a vote of 599 in favor, 7 against, and 35 abstentions. They will take effect 20 days after publication in the EU Official Journal, with member states granted 12 months to comply.