The European Commission wants to make payments the new norm within ten seconds. However, nearly nine out of ten transfers within the European Union are still made traditionally, with the money ending up in the beneficiary’s account the next day.
“This is comparable to the transition from post to e-mail,” said European Commissioner for Financial Services Mairead McGuinness. Traditional transfers are handled during office hours and take at least one business day. Instant payments, on the other hand, happen within ten seconds, any time of the day and night.
Although the technology for these payments has been available since 2017, they still represented only 11 percent of all transfers within the EU at the beginning of this year.
However, the Commission only sees advantages. It is said that instant payments increase the consumer’s comfort, for example, when they have to make urgent payments. In addition, they improve cash flow and reduce costs for businesses and the retail sector.
More money is being released: every day, almost 200 billion euros are stuck in the no man’s land between ‘paid’ and ‘received’. “The ability to send and receive money in seconds is essential as bills for families and SMEs increase, and every penny counts,” McGuinness said.
To stimulate the advance of instant payments, the Irish European Commissioner presented a revision of the binding rules on the European Payments Area (SEPA). For example, all payment service providers are obliged to make instant payments possible.
However, one in three providers does not yet offer this option. They should also not charge a higher price than traditional transfers. Finally, the adjustments, which must be approved by the Member States and the European Parliament, should ensure that these payments can be made securely and unhindered throughout the EU.