EU legislators have ruled that payments service providers (PSPs) active in the trade block will have to ensure immediate transfers for retail customers and businesses.
The European Parliament announced this week that updates to the Single Euro Payments Area (SEPA) rules have been approved by MEPs, with 599 approving, seven opposing and 35 abstaining. The updates will require banks and PSPs to guarantee that credit transfers are ‘affordable and immediately processed’.
A timeframe of 10 seconds has been placed at the centre of the EU’s new policy. Instant credit transfers must be conducted ‘regardless of the day or hour’ and funds must arrive to an account within 10 seconds. Payers should be informed whether or not transferred funds have been made available to the recipient within the same timeframe.
The rules will be applied across all 27 EU member states, including those which do not use the euro, such as Poland, Croatia and Hungary.
Payments made from euros to another local currency, or vice versa, will be subject to a longer transition period than the 10 second rule, however,due to ‘possible concerns about access to liquidity in euro’.
“The Instant Payments Regulation marks the long-awaited modernisation of payments in the European single market,” said Michiel Hoogeveen, Lead MEP, a Dutch politician and member of the European Conservatives and Reformists (ECR).
“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.”
Lastly, the new rules also contain requirements around safeguarding, with PSPs ordered to ensure robust and up-to-date fraud detection and prevention measures. To work towards this, PSPs should ‘immietadly’ provide a service to verify recipient ID, without any new charges or fees.
MEPs have also requested PSPs allow clients to set maximum amount limits for instant euro credit card transactions and if firms do not fulfil fraud prevention duties, resulting in financial damages, compensation may be required.
Finally, PSPs should verify whether clients are subject to sanctions or other restrictive measures relating to money laundering and terrorist financing.
