Banking & Fintech /

Euro transfers will arrive in 10 seconds

On February 7, 2024, the European Parliament adopted new legislation to ensure the immediate transfer of funds to retail and business bank accounts across the EU via instant transfers in euros. The text, already agreed with EU member states, updates the current Single Euro Payments Area (SEPA) rules.

What PSUs will gain?

An instant transfer will be made regardless of the day or time, and the money must reach the recipient’s account within ten seconds. The payer should also be informed within ten seconds whether the transferred funds have been made available to the recipient. Everyone will benefit from PSUs – businesses and individuals- from the new regulations.

Customer safety, penalties, and sanctions

The legislature expects suppliers to implement robust and up-to-date fraud detection and prevention measures to avoid transferring funds to the wrong account through fraud or error.

Under these measures, Union PSPs should:

  1. Provide the recipient’s identity verification service immediately and without additional fees or commissions.
  2. allow its customers to set a maximum amount for instant credit transfers in euros, which can be easily modified before the next transfer.
  3. Payment service providers offering instant credit transfers should also check whether any of their customers are subject to sanctions or other restrictive measures related to money laundering and terrorist financing.

In the event of injury, customers will be able to demand compensation from service providers under the new rules if they fail to fulfill these obligations.

Non-eurozone countries will have more time to implement the new rules

Member states whose currency is not the euro, after a longer transition period, will also have to apply the rules where accounts can already be regularly transacted in euros. For such accounts, a special derogation will be introduced for making payments within ten seconds outside business hours, due to possible concerns about access to euro liquidity.

Next steps

The new regulations enter into force 20 days after publication in the Official Journal of the EU. Payment service providers based in the eurozone will have nine months to prepare to receive funds from instant euro transfer orders and 18 months to prepare for outgoing transfers.

Author team leader DKP Legal Piotr Glapiński
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