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EU Council Adopts Instant Payments Regulation: Transforming Financial Transactions Across Member States

The Council of the European Union has announced the adoption of a new regulation aimed at facilitating instant payments in euros for consumers and businesses across EU and EEA countries. The regulation is poised to significantly enhance the accessibility and efficiency of financial transactions within the region.

EU Council Adopts Instant Payments Regulation: Transforming Financial Transactions Across Member States

In a statement released by the Council, representing the 27 national governments, it was emphasized that the regulation marks a pivotal step towards bolstering the strategic autonomy of the European economic and financial sector. By reducing reliance on third-country financial institutions and infrastructures, the new rules are expected to fortify the resilience of the EU's financial ecosystem.

The Council further elaborated on the anticipated benefits of the regulation, asserting that improved cash flow mobilization will not only empower citizens and companies but also pave the way for the emergence of innovative value-added services.

Key provisions of the instant payments regulation include the ability to transfer funds within a mere ten seconds, round the clock, and throughout the year, transcending geographical boundaries within the EU. Notably, the regulation accommodates the needs of both euro area and non-euro area entities.

Payment service providers, particularly banks offering standard credit transfers in euro, will be mandated to facilitate instant payments in euro without imposing charges higher than those applicable to standard credit transfers.

The implementation of the new rules will entail a transition period, varying in duration between the euro area and non-euro area jurisdictions, with the latter requiring additional time for adjustment.


Moreover, the regulation extends access to payment systems for payment and e-money institutions (PIEMIs), subject to appropriate safeguards to mitigate potential risks to the financial system.

Among the stringent requirements introduced by the regulation is the mandate for instant payment providers to verify the correspondence between the beneficiary's IBAN and name, thereby enhancing security and fraud prevention measures.

Importantly, the regulation incorporates a review clause, mandating the European Commission to furnish a report evaluating the evolution of credit charges, ensuring accountability and adaptability in the regulatory framework.

This significant initiative aligns with the broader objectives of the capital markets union, an EU initiative aimed at fostering a unified capital market across member states to stimulate investment, savings, and economic growth.

The proposal for instant payments, introduced by the Commission on October 26, 2022, seeks to modernize and amend the Single Euro Payments Area (SEPA) regulation of 2012, underscoring the EU's commitment to advancing financial integration and efficiency within the region.



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