The new regulation, which was provisionally agreed in November, aims to make sure that retail clients and businesses, especially SMEs, will not have to wait for their money, as well as to enhance the safety of transfers. Banks and other payment service providers (PSPs) will have to ensure credit transfers are affordable and immediately processed. The text, already agreed with EU member states, updates the current Single Euro Payments Area (Sepa) rules.

Under the rules, an instant credit transfer is supposed to be executed regardless of the day or hour and the money must arrive into the recipient’s account within ten seconds. The payer should be also informed within ten seconds of whether or not the funds transferred have been made available to the intended recipient.

Member states whose currency is not the euro will also have to apply the rules, where the accounts already offer regular transactions in euro, after a longer transition period. There will be a special derogation from making the payment within ten seconds for such accounts outside business hours, given possible concerns about access to liquidity in euro.

To guarantee safety, PSPs should have in place robust and up-to-date fraud detection and prevention measures, to avoid credit transfers going into the wrong account due to fraud or error. To this end, PSPs operating in the EU should ‘immediately’, and without any additional charges or fees, provide a service to verify the identity of the recipient.

As an additional safeguard against fraud, PSPs should allow their clients to set a maximum amount for instant credit transfers in euro, which could be easily modified prior to the next transfer.

If a PSP does not fulfil its fraud prevention duties and this results in financial damage, a client may demand to be compensated by the service provider, according to the new rules.

PSPs offering instant credit transfers should also verify whether any of their clients are subject to sanctions or other restrictive measures related to money laundering and terrorist financing.

Charges applied by a PSP in respect to instant credit transfer transactions in euro cannot be higher than the charges applied to “non- instant” credit transfer transactions in euro.

Michiel Hoogeveen (ECR, NL) the lead MEP says: “The Instant Payments Regulation marks the long-awaited modernisation of payments in the European single market. Customers can now say goodbye to the inconvenience of waiting two or three working days to access their money. We are delivering on something that people and businesses truly care about: transferring money within 10 seconds at any time of the day.”

The text was adopted with 599 votes to 7 and 35 abstentions.

The new rules enter into force 20 days after publication in the EU Official Journal. Member states will have 12 months to conform.