The European Commission has announced plans for legislation that it says will make instant payments in euro available to all citizens and businesses with a bank account in EU and European Economic Area (EEA) countries.

Instant payments allow people to transfer money at any time of any day within ten seconds – much faster than traditional credit transfers that arrive at the payee's account only by the following business day, which can take up to three calendar days.

“The proposal aims to ensure that instant payments in euro are affordable, secure, and processed without hindrance across the EU,” the body said in a statement.

Speed and convenience

The commission said that instant payments would increase speed and convenience for consumers, and would also improve cash flow, and bring cost savings, for businesses.

The proposal, which amends and modernises a 2012 regulation on the Single Euro Payments Regulation (SEPA), consists of four requirements covering instant payments in euro:

• Making instant euro payments universally available, with an obligation on EU providers that already offer credit transfers in euro to also offer their instant version within a defined period,
• Making instant euro payments affordable, with an obligation on payment-service providers to ensure that the price charged for instant payments in euro does not exceed the price charged for traditional, non-instant credit transfers in euro,
• Providers must verify the match between the bank account number (IBAN) and the name of the beneficiary provided by the payer, in order to alert the payer of a possible mistake or fraud before the payment is made,
• Payment-service providers will verify, at least daily, their clients against EU sanctions lists, instead of screening all transactions one by one.

The EU body estimates that almost €200 billion – known as ‘payment float’ – is locked in transit in the financial system on any given day.

‘Every cent counts’

At the beginning of 2022, only 11% of all euro credit transfers in the EU were instant.

Mairead McGuinness (the commissioner responsible for financial services, pictured) said that there was no reason why citizens and businesses could not send and receive money immediately, as the technology had been in place since 2017.

“This facility to send and receive money in seconds is particularly important at a time when bills for households and SMEs are increasing, and every cent counts,” she added.