The European Parliament has adopted a new set of rules to ensure that transferred funds arrive immediately in bank accounts across the EU. The objective of the new regulation is to eliminate delays in fund transfers for retail clients and businesses, particularly small and medium-sized enterprises (SMEs), and to improve the security of transactions.

Under the agreed-upon text with EU member states, banks and other payment service providers (PSPs) will be obligated to ensure that credit transfers are both affordable and promptly processed, thereby updating the existing Single Euro Payments Area (SEPA) rules. Instant credit transfer, as outlined in the regulation, mandates that transfers occur promptly irrespective of the time or day, with funds arriving in the recipient's account within ten seconds. Additionally, payers must receive confirmation within the same timeframe regarding the availability of the transferred funds to the intended recipient.

Non-euro currency member states are also required to adhere to the rules if their accounts facilitate regular euro transactions, albeit with a longer transition period. A temporary exemption from the ten-second payment requirement will be granted for accounts outside of business hours due to potential concerns about euro liquidity access. To ensure customer safety, PSPs are mandated to implement robust fraud detection and prevention measures, preventing misdirected credit transfers due to fraud or errors.

PSPs operating within the EU must provide identity verification services immediately and without additional charges. Additionally, clients are empowered to set maximum amounts for instant credit transfers in euros to mitigate fraud risks. Pricing and compensation under the new rules Under the new rules, clients have the right to demand compensation from PSPs in cases where failure to prevent fraud results in financial harm.

PSPs facilitating instant credit transfers are also obligated to verify whether their clients are subject to sanctions or other restrictions related to money laundering and terrorist financing. Pricing for instant credit transfer transactions in euros must remain consistent with charges for non-instant credit transfer transactions in euros, as stipulated by the regulation. In a statement, Michiel Hoogeveen, the lead MEP, talked about the Instant Payments Regulation as a long-awaited modernisation of payments in the European single market, emphasising the convenience of transferring money within ten seconds at any time of the day.

The regulation was approved with 599 votes in favour, 7 against, and 35 abstentions. It will come into effect 20 days after its publication in the EU Official Journal. .