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European Union Council and Parliament Reach Agreement on New Instant Payment Rules

The Council of the European Union (EU) has reached a political agreement with the European Parliament regarding the instant payments proposal, which looks to improve the availability of instant payment options in euros to consumers and businesses in the EU and in EEA countries.

Instant payments enable 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 European Union member state.

The new instant payment rules will be introduced to improve the strategic autonomy of the European economic and financial sector as they will help reduce any excessive reliance on third-country financial institutions and infrastructures.

Under the provisionally agreed rules, payment service providers (PSPs) such as banks, which provide standard credit transfers in euros, will also be required to offer the service of sending and receiving instant payments in euros.

The provisional agreement also takes non-euro area entities into consideration, with the Council and Parliament agreeing 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 will require more time to adjust.

The co-legislators agreed to grant access for payment and e-money institutions (PIEMIs) to payment systems, by changing the settlement finality directive (SFD). As a result, these entities will be required to offer the service of sending and receiving instant credit transfers, after a transitional period.

The Council and Parliament have added appropriate safeguards to ensure that the access of PIEMIs to payment systems doesn’t add additional risk to the system.

Under the new rules, instant payment providers will need to verify that the beneficiary’s IBAN and name match to alert the payer to possible mistakes or fraud before a transaction is made. This requirement will apply to regular transfers too.

‘A very important piece of legislation’
Nadia Calviño, Deputy Prime Minister of Spain and Minister for Economy and Digitalisation
Nadia Calviño, Deputy Prime Minister of Spain and Minister for Economy and Digitalisation

Nadia Calviño, Vice President of the Government and Minister of Economy for Spain, explained her view on the new instant payments regulation agreement: “It is a very important piece of legislation, not only in terms of the integration of European financial markets but most importantly because of the impact for European companies and citizens who will be able to make instant payments throughout the whole EU with devices and mechanisms similar to the ones existing already in some Member States.

“For example, Bizum in the case of Spain, thus facilitating cross-border payments and leading to a more efficient financial sector within the EU and more integrated retail financial markets in the EU.”

On 26 October 2022, the European Commission proposed new regulations on instant credit transfers in euros. It amends and modernises the Single Euro Payments Area (SEPA) regulation of 2012 on standard credit transfers in euros by adding specific provisions for instant credit transfers in euros.


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