Instant bank transfers and payments could soon become the norm for businesses and individuals in Europe.
If the European Commission’s latest proposal makes it through parliament, secure instant payments will soon be possible across the continent, allowing businesses and individuals to transfer funds within a matter of seconds.
Currently just 11% of transfers in the EU are instant. Typically, money is sent to a payment service provider during business hours, usually arriving to the receiver’s account the next business day. If the request comes in outside of business hours – say on a Friday afternoon – the transfer could take three days to arrive.
“Instant payments are fast becoming the norm in many countries,” said Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People. “They should be accessible to everyone in Europe too, so that we stay globally competitive and make the most of the innovation opportunities offered by the digital age. People gain with more choice and convenience; businesses gain with better control of their cash flow and lower operational costs. [This] proposal will strengthen our economy, make it more efficient and help it to grow.”
“Moving from next day transfers to 10 second-transfers is seismic and comparable to the move from mail to e-mail,” declared Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union. “Yet today, nearly nine out of 10 credit transfers in euros are still processed as traditional ‘slow’ transfers. There is no reason why many citizens and businesses in the EU are not able to send and receive money immediately, the technology to provide for instant payments has been in place since 2017.”
The proposal will ensure that the instant payments are universally available and affordable, ensuring fees never exceed traditional transfer fees. It also will be safe, with providers being obliged to verify the match between IBAN and account holder, in case of possible human error when inputting one or the other. Finally, it will also make sure those who are under EU sanctions are not receiving illicit cash via a daily verification process.
McGuiness adds, “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 hundred counts. This initiative will directly benefit EU citizens and businesses.”
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