European Parliament votes for instant bank transfers in EU

Members of the European Parliament voted on February 7 to adopt new rules to ensure transferred funds arrive immediately in the bank accounts of retail customers and businesses across the European Union.

The new regulation 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, the European Parliament said in a statement.

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.

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 10 seconds. The payer should be also informed within 10 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 10 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.

The text was adopted with 599 votes to seven, with 35 abstentions.

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

(Photo: Frank Schwichtenberg)

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