Brussels wants to encourage the deployment of instant euro payments and proposes legislation

The European Commission has approved a proposal to speed up the introduction of instant euro payments. The technology exists and Europeans should be able to send and receive money immediately, the executive body said, revealing its intentions to push the sector towards widespread adoption.

EU set to bring instant payments to Europe

The European Commission has put forward a legislative proposal to allow all citizens and businesses access to instant payments in the European single currency. The payments should be secure and affordable for anyone with a bank account in the European Union and the European Economic Area, officials insisted in an announcement Wednesday.

Instant payments are much faster than traditional transfers and increase convenience for consumers, reduce costs for businesses and will free up to 200 billion euros currently stuck in transit each day for consumption or investment, the executive branch in Brussels argued. The Commission wants their use to be widespread.

Commenting on the initiative, Executive Vice President for an economy that works for people Valdis Dombrovskis stressed that instant payments will allow Europe to remain competitive and take advantage of the innovations of the digital age. However, nine out of ten euro transfers are still treated as transfers.”slow“Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union, said.

Mairead McGuinness compared the shift from next-day transfers to transfers in seconds to the shift from postal mail to email. She believes there is no reason why European citizens and businesses cannot send and receive money immediately since the necessary technology has been in place since 2017. Since it may take another decade for instant payments to become the norm, “we are pushing this industry in that direction“, said the Commissioner at a press conference.

Under the proposal, which amends the Single Euro Payments Area (SEPA) regulation, payment service providers that offer credit transfers will be required to also support instant payments and maintain fees that do not exceed those charged for traditional euro credit transfers. They will also be required to verify that the bank account and beneficiary name match, and to check that their customers are not being sanctioned by the EU.

The European Commission expects these changes to increase competition in the payments market. They were proposed as eurozone financial authorities work on plans to issue a digital version of the common European currency. In July, European Central Bank officials said that widespread acceptance, ease of use, low cost and speed of transactions will be among the key features of the digital euro.