Council adopts regulation on instant payments

On 26 February 2024, the Council of the European Union has adopted a regulation that will make instant payments fully available in euro to consumers and businesses in the EU and in EEA countries. The instant payments regulation will allow 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 EU Member State.

Payment service providers, such as banks, which provide standard credit transfers in euro, will be required to offer the service of sending and receiving instant payments in euro. If the payment comes from a non-euro account, payment service providers must convert the transaction amount to euros. Charges applied by a PSP (payment service provider) located in a Member State whose currency is not the euro in respect of cross-border credit transfers in euro are to be the same as charges applied by that PSP in respect of national credit transfers in the national currency of that Member State. However, outside of office hours, individual banks can maximize the amount that can be transferred, but the value of this amount cannot be lower than EUR 25,000.

The new rules will enter into force after a transition period that will be faster in the euro area and longer in the non-euro area - like Hungary - that needs more time to adjust. The new rules will 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. Improving the possibilities to mobilize cash-flows will bring benefits for citizens and companies and allow for innovative added value services.

The legislation also aims to ensure that the EU keeps pace with technological developments, and protects the financial system, therefore, under the new rules, instant payment providers will need to verify that the beneficiary’s IBAN and name match in order to alert the payer to possible mistakes or fraud before a transaction is made.