The European Parliament has adopted new rules to ensure transferred funds arrive immediately into the bank accounts of retail customers and businesses across the EU.
The new regulation, adopted on Wednesday by MEPs, is a boost to SMEs who often require quick and immediate access to funds. well as enhancing the safety of transfers.
Under the regulation, banks and other payment service providers (PSPs) will have to ensure credit transfers are affordable and immediately processed.
For instance, an instant credit transfer is supposed to be executed regardless of the day or hour and the money must arrive into the recipient’s account within ten seconds, according to a European parliament news release. The payer should be also informed within ten seconds of whether or not the funds transferred have been made available to the intended recipient, it said.
Member states whose currency is not the euro will also have to apply the rules, where the accounts already offer regular transactions in euro, after a longer transition period.
There will be a special exemption making the payment within ten seconds for such accounts outside business hours, given possible concerns about access to liquidity in euro.
To guarantee safety, the regulation states that PSPs should have in place up-to-date fraud detection and prevention measures, to avoid credit transfers going into the wrong account due to fraud or error. Where this does not already exist, PSPs operating in the EU should immediately provide a service to verify the identity of the recipient without any extra fees.
As an additional safeguard against fraud, the PSPs should allow their clients to set a maximum amount for instant credit transfers in euro, which could be easily modified prior to the next transfer.
Acccording to the new rules, if a PSP does not fulfil its fraud prevention duties and this results in financial damage, a client may demand to be compensated by the service provider.
The new rules enter into force 20 days after publication in the EU Official Journal. PSPs located in the euro area will have nine months to be ready to receive instant credit transfers in euro and 18 months to send them.
Michiel Hoogeveen (ECR, NL) the lead MEP said: “The Instant Payments Regulation marks the long-awaited modernisation 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.”
