Rule detail : 190662

EU CNCL Instant Payments in Euro

Updated on: Jul 26, 2024

Latest Event

Jul. 2024 Clarification of Requirements
On Jul. 23, 2024, EU CMSN issued clarifications to over 200 questions that had been collected from stakeholders in advance of the online implementation workshops.
Document reflects clarifications provided by Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) services during workshops.
In Aug. 2024, ECB discussed a potential verification of payee service, see #221857.
In Oct. 2024, EPC issued first Verification of Payee (VOP) scheme rulebook, #201780.

On Nov. 7, EU CNCL confirmed provisional agreement reached with EP.

Instant payments proposal: Council and Parliament reach provisional agreement.
Follows EU CNCL Jul. 2023 issued information note setting out opening position of the three institutions on the proposal, prior to the trilogue phase, see #173392.
EU CNCL Update
Council and EP have reached a political agreement on the instant payments proposal.
Will improve availability of instant payment options in euro to consumers, businesses.
The new rules will improve the strategic autonomy of economic and financial sector as they will help reduce any excessive reliance on third-country financial institutions.
Improving the possibilities to mobilize cash-flows will bring benefits for citizens and companies and allow for innovative added value services.
Provisional agreement takes into consideration particularities of non-euro area entities.
Under the provisionally agreed rules, payment service providers such as banks, which provide standard credit transfers in euro, will also be required to offer the service of sending and receiving instant payments in euro; the charges that apply (if any) must not be higher than the charges that apply for standard credit transfers.
Council and EP agreed that new rules will come into force after a transition period that will be faster in euro area and longer in non-euro area, who need more time to adjust.
The co-legislators agreed to grant access for payment and e-money institutions (PIEMIs) to payment systems, by changing the settlement finality directive (SFD).
As a result, these entities will be covered by the obligation to offer the service of sending and receiving instant credit transfers, after a transitional period.
The co-legislators added appropriate safeguards to ensure that the access of PIEMIs to payment systems doesn’t carry additional risk to the system.
Instant payment providers will need to verify that beneficiary’s IBAN and name match in order to alert the payer to possible mistakes or fraud before a transaction is made.
This requirement will apply to regular transfers too; the Council and Parliament also included a review clause with a requirement for the Commission to present a report containing an evaluation of the development of credit charges.
EP Update
The provisional agreement updates the Single Euro Payments Area (SEPA) legislation (SEPA Reg 260/2012); payment service providers (PSPs) such as banks, providing transfer services in euro, will be required to offer the service of instant credit transfers.
Member states whose currency is not the euro will also have to apply the rules, where accounts already offer regular transactions in euros, after a longer transition period.
There will be a special derogation for such accounts outside business hours given possible concerns about access to liquidity in euros.
Instant Credit Transfer
According to agreement, instant credit transfer is supposed to be executed regardless of the day or hour and immediately processed, so payee’s payment account is credited with amount transferred within 10 seconds after time of receipt of the payment order.
The payer should be also informed within 10 seconds whether or not the funds transferred have been made available to the payee.
Where payment order for an instant credit transfer in euro is submitted from payment account that is not denominated in euro, a PSP should convert amount of transaction from currency in which account is denominated into euro, upon receiving that order.
Customer Safety, Penalties and Sanctions
Negotiators agreed PSPs should have in place robust fraud detection and prevention measures, designed to prevent a credit transfer being sent to an unintended payee.
PSPs operating in EU should immediately/without additional charges or fees, provide a service to verify identity of payee to whom the payer intends to send a credit transfer.
Where a discrepancy is detected between the payment account identifier of the payee and the name of the payee provided by the payer a client should be notified.
And where such information is not provided, a client should be compensated by a PSP.
As additional safeguard, PSPs should allow its clients to set a maximum amount for instant credit transfers in euro, which could be easily modified prior to next transfer.
Moreover, PSPs offering instant credit transfers should verify whether any clients are subject to sanctions or other restrictive measures related to the prevention of ML/TF.
Charges Stay the Same
Charges applied by a PSP on payers and payees in respect of instant credit transfer transactions in euro cannot be higher than charges for credit transfer transactions.
Next Steps
The provisional political agreement reached by the EP negotiating team will now have to be approved first by the Economic and Monetary Affairs Committee, followed by a plenary vote; the Council also has to approve the deal, before it can come into force.
Nov. 8, 2023 EC Statement
On Nov. 8, 2023, EU CMSN issued statement welcoming recent political agreement.
Nov. 30, 2023 Confirmation of Final Text
On Nov. 30, 2023, EU CNCL issued item note on confirmation of final compromise text.
Coreper invited to approve text of draft regulation as set out in doc. 15764/23 REV 1 with a view to reaching an agreement at first reading with the European Parliament.
And to give to Chairman of Coreper the mandate to inform the Chair of Parliament's ECON Committee that, should EP adopt the text of the proposal in the exact form as set out in doc. 15764/23 REV 1, the Council would adopt the proposed regulation.
Dec. 5, 2023 EP Agreement Recap
On Dec. 5, 2023, EP issued a release Instant payments: the benefits for customers and business which provides a recap on the EC agreement on instant payments.
EP's economic committee will vote on agreement followed by MEPs in plenary session.
Parliament and council will need to approve the deal before it can enter into force.
Dec. 25, 2023 EU CNCL Offer Letter to EP
On Dec. 25, 2023, EU CNCL issued information note attaching offer letter to the EP.
Feb. 7, 2024 EP Adoption
On Feb. 7, 2024, EP announced MEPs voted to adopt new rules to ensure transferred funds arrive into the bank accounts of retail customers and businesses across the EU.
The text, already agreed with EU member states, updates the current SEPA rules and focuses on consumer safety, robust fraud detection, verification of recipient's identity.
Banks and PSPs will have to ensure credit transfers are affordable and immediately processed, instant credit transfer should arrive in recipient account within 10 seconds.
Instant credit transfers to meet this target regardless of the day or time of transfer.
Payer to be informed within 10 seconds of whether funds available to the recipient.
Member states whose currency is not the euro will also have to apply the rules, where accounts already offer regular transactions in euro, after a longer transition period.
Will be special derogation from making payment within 10 seconds for such accounts outside business hours, given possible concerns about access to liquidity in euro.
PSPs should immediately, without additional charges or fees, provide a service to verify the identity of the recipient, allow clients to set maximum amount for instant credit transfers in euro, which can be easily modified before the next transfer by the client.
Should also verify whether any of their clients subject to sanctions, other restrictive measures re AML/CFT, if does not fulfill duties may need to compensate harmed client.
Charges for instant euro credit transfer cannot be higher than for non-instant transfer.
Rules enter into force 20 days after publication in Official Journal, euro area PSPs will have 9 months to be ready to receive euro instant credit transfers, 18 months to send.
Feb. 12, 2024 EP First Reading Outcome
On Feb. 12, 2024, EU CNCL issued information note on outcome of EP's first reading.
When it voted on Feb. 7, 2024, the plenary adopted the compromise amendment (amendment number 2) to the above proposal for a regulation.
The Commission’s proposal as thus amended constitutes the Parliament's first-reading position which is contained in its legislative resolution as set out in the Annex to note.
Parliament's position reflects what had been previously agreed between institutions.
The Council should therefore be in a position to approve the Parliament's position.
Act would then be adopted in wording which corresponds to the Parliament's position.
Feb. 2024 Final Text of Act
On Feb. 14, 2024, EU CNCL issued final text of the act (PE-CONS 76/23) for adoption.
In Feb. 2024, EPC issued draft verification of payee scheme rulebook, see #201780.
Feb. 19, 2024 Proposed Adoption
On Feb. 19, 2024, EU CNCL issued item note concerning the proposed adoption of act.
Coreper asked to confirm agreement and to suggest that Council approve Parliament's position, as set out in PE-CONS 76/23, as an "A" item at a forthcoming meeting.
If the Council approves the Parliament's position, the legislative act will be adopted.
Feb. 23, 2024 Correction
On Feb. 23, 2024, EU CNCL issued note attaching correction to ST-6407-2024-INIT.
Feb. 26, 2024 Adoption
On Feb. 26, 2024, EU CNCL announced it has adopted regulation on instant payments.
The regulation will improve the strategic autonomy of the European economic and financial sector, reduce excessive reliance on third-country financial institutions.
Payment service providers will be required to offer the service of sending and receiving instant payments in euro; charges must be the same as for standard credit transfers.
The regulation grants access for payment and e-money institutions (PIEMIs) to payment systems, by changing the Settlement Finality Directive (SFD).
As a result, these entities will be covered by the obligation to offer the service of sending and receiving instant credit transfers, after a relevant transitional period.
Safeguards ensuring access of PIEMIs to payment systems doesn’t carry any risks.
Instant payment providers will need to verify that the beneficiary’s IBAN and name match to alert the payer to possible mistakes or fraud before a transaction is made.
The same will apply to regular transfers too; regulation includes a EC review clause.
The new rules will come into force after a transition period that will be faster in the euro area and longer in the non-euro area, that needs more time to adjust.
Mar. 2024 Official Journal
On Mar. 19, 2024, EU CNCL issued final Reg 2024/886 in the EU Official Journal.
Member States shall adopt, publish and apply, by Apr. 9, 2025, the laws, regulations and administrative provisions necessary to comply with Articles 3 and 4.
Regulation in force on 20th day following that of OJ publication, Apr. 8, 2024.
Follows Mar. 18, 2024, EU CNCL issued adopted text, of Mar. 13, pending OJ release.
Regulation shall enter into force on the twentieth day following that of OJ publication.
In Mar. 2024, EPC consulted on change requests for 5 EPC rulebooks, see #204411.
Jul. 2024 Clarification of Requirements
On Jul. 23, 2024, EU CMSN issued clarifications to over 200 questions that had been collected from stakeholders in advance of the online implementation workshops.
Document reflects clarifications provided by Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) services during workshops.
In Aug. 2024, ECB discussed a potential verification of payee service, see #221857.
In Oct. 2024, EPC issued first Verification of Payee (VOP) scheme rulebook, #201780.

Regulators

EP; EU CMSN; EU CNCL

Entity Types

Bank; CNSM; MSB

Reference

PR, FAQ, 7/23/2024; OJ L, 3/19/2024; PR, 3/18/2024; PR, Reg 2024/886, PE-CONS 76/1/23 REV 1, 3/13/2024; PR 157/24, 2/26/2024; PR, 2/23/2024; PR, 6407/1/24 REV 1, 2/22/2024; PR, 2/19/2024; PR, 6407/24, 2/16/2024; PR, PE-CONS 76/23, 2/14/2024; PR, 2/12/2024; PR, 6174/24, 2/9/2024; P9_TA(2024)0065, A9-0230/2023, PR 20240202IPR17318, 2/7/2024; PR, 12/25/2023; PR, 17077/23, 12/21/2023; PR, 12/5/2023; PR, 11/30/2023; PR, 15763/1/23 REV 1, 15764/1/23 REV 1, 11/28/2023; PR MEX/23/5645, 11/8/2023; PR, 11/7/2023; COM(2022)546; 2022/0341(COD); SFD Dir 98/26/EC; CMU; Citation: SEPA Reg 260/2012; PE-CONS 76/23; Reg 2024/886;

Functions

AML; Compliance; Financial; Fraud; Legal; Product Administration; Sanctions; Settlement; Technology; Treasury

Countries

European Union