Immediate payments transfers: benefits for consumers and companies

Revolutionizing Transactions: The Impact of Immediate Transfers on Consumers and Businesses

Immediate payments represent a significant leap in payment technology, enabling the transfer of funds within mere seconds. Tired of waiting days for bank payments? The good news is that faster alternatives now exist, allowing money to be transferred and received almost instantly.

Advantages of Immediate Payments: A Game-Changer for All

Immediate payments offer numerous advantages for individuals and businesses alike, streamlining payment processes and increasing efficiency.

  • Convenience for Individuals: Splitting a restaurant bill becomes a breeze with instant transfers, providing swift settlements among friends.
  • Enhanced Cash Flow for SMEs: Businesses, especially small and medium enterprises (SMEs), gain better control over their cash flow. Merchants benefit from reduced operating costs and can offer improved services, such as instant refunds.
  • Optimized Treasury Management: Public institutions, NGOs, and charities benefit from faster access to contributions, while banks can leverage immediate payments to develop innovative financial services and bolster their competitive position.

The EU Landscape: Navigating Challenges and Opportunities

As of early 2022, only 11% of all EU euro transfers were completed within seconds, leaving nearly €200 billion blocked daily. The availability and fees associated with instant payments vary significantly across EU countries.

Milestone Agreement: Shaping the Future of Immediate Payments

In October 2022, the Commission proposed legislation to make instant euro payments universally accessible. A breakthrough was achieved in November 2023 when European Parliament negotiators reached an agreement with the Council on the final legislative text.

Moreover, According to the agreed text:

  • An instant transfer must be executed within 10 seconds, irrespective of the day or time, with the payer receiving a prompt receipt.
  • Payment service providers must promptly convert the transaction amount into euros for payments from non-euro-denominated accounts.
  • Robust fraud detection systems are mandatory for payment service providers, along with measures to prevent transfers to unwanted beneficiaries.
  • Additional measures are introduced to curb criminal activities like money laundering or terrorist financing.
  • No extra fees should be levied for instant payments compared to traditional euro transactions.
  • Non-euro Member States will also adhere to the rules, albeit after a transition period.

This initiative compels EU banks to offer instant payment services to customers, free of additional costs and within strict timelines. Customers will enjoy seamless payment options, businesses will face lower costs, and the EU payments system will thrive,” stated MEP Michiel Hoogeveen.

Finally: The agreement awaits approval in Parliament’s economic committee and subsequent plenary voting. Council approval is also essential before the agreement can take effect, marking a significant stride toward a more efficient and accessible payment landscape in the EU.

Read more: Personal Finances: How does inflation affect?


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