Brussels: Europe and the Arabs
The Council of the European Union, which represents the governments of member states, has reached a political agreement with the European Parliament on the instant payments proposal, which will improve the availability of instant payment options in euros for consumers and businesses in the European Union and countries of the European Economic Area.
According to a European statement issued in Brussels, the new rules will improve the strategic independence of the European economic and financial sector because they will help reduce any excessive dependence on financial institutions and infrastructure in a third country. Improving cash flow mobilization capabilities will bring benefits to citizens and businesses and allow the provision of innovative value-added services.
Instant payments allow 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. The temporary agreement takes into account the specificities of entities outside the euro area.
Under the provisionally agreed rules, payment service providers such as banks, which offer standard credit transfers in euros, will also be required to offer the service of sending and receiving instant payments in euros. The applicable fees (if any) shall not be higher than the fees applicable to standard credit transfers.
The Council and Parliament agreed that 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, which needs more time to adapt.
Lawmakers have agreed to grant payment and electronic money institutions (PIEMIs) access to payment systems, by changing the Settlement Finality Directive (SFD) in order. As a result, these entities will include the obligation to provide the service of sending and receiving instant credit transfers, after a transitional period. Lawmakers have added appropriate safeguards to ensure that PIEMIs' access to payment systems does not carry additional risks to the system.
Under the new rules, instant payment providers will need to verify that the beneficiary's International Bank Account Number (IBAN) matches the name in order to alert the payer to potential errors or fraud before a transaction is made. This requirement will apply to regular transfers as well
The Council and Parliament included a review clause requiring the Commission to submit a report containing an assessment of the development of credit fee charges.
background
This initiative comes in the context of completing the Capital Markets Union. In March 2021 and April 2022, the Council adopted conclusions highlighting the widespread use of instant payments and indicating the goal of developing competitive market-based payment solutions at EU level.

On 26 October 2022, the Commission presented a proposal to regulate instant credit transfers in euros. It amends and updates the Single Euro Payments Area (SEPA) Regulation 2012 on standard credit transfers in euros by adding to it specific provisions for instant credit transfers in euros.
The aim of the draft regulation is to increase the uptake of instant credit transfers in euros and to facilitate access to these services for consumers and businesses in the Union. There will be the following requirements regarding instant payments in Euros:
Making instant payments in euros available globally, with EU payment providers that already offer credit transfers in euros required to also offer their own instant version
Make instant euro payments more affordable, with payment service providers committing to ensure that the rate charged for instant euro payments does not exceed the rate charged for traditional and non-instant euro credit transfers
Increase confidence in credit transfers, with service providers required to verify the match between the bank account number (IBAN) and the beneficiary name provided by the payer in order to alert the payer of a possible error or fraud before making the payment.
Removing friction in processing instant Euro payments while maintaining effective screening of persons subject to EU sanctions, through a procedure whereby payment service providers check their customers at least daily against EU sanctions lists, rather than screening all transactions one by one