The Council of the EU has adopted a regulation that will make instant payments fully available in euros to consumers and businesses in the EU and in EEA countries.

The new rules will improve the strategic autonomy of the European economic and financial sector, reducing excessive reliance on third-country financial institutions and infrastructures. 

The instant payments regulation will allow people to transfer money within ten seconds at any time of the day, including outside business hours, not only within the same country but also to another EU member state. The new rules will come into force after a transition period.

The industry reacts to the announcement

Figures within the industry have reacted to the announcement. Kjeld Herreman, Head of Strategy Advisory at RedCompass Labs, said: “This is a welcome development by the European Union Council to adopt instant payments in the euro currency. It means banks and payment service providers will soon have to offer the sending and receiving of instant payments in euros at no extra charge within ten seconds.

“This is great news for European consumers and businesses but the technical implementation within a very ambitious timeline is set to be an enormous challenge for banks. It will require them to rapidly assess their digital capabilities and to work together with their counterparts and service providers to address these challenges in a short period.

“Banks must soon enable file-based instant payments without surcharges for their business clients. This means that even payment service providers that are already capable of processing instant payments will massively need to scale their throughput.

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“Banks will also need to figure out how to facilitate an immediate currency conversion when the beneficiary’s account is not denominated in Euro. With FX markets not suited for a 24/7 environment, the technical feasibility will be extremely challenging for banks to address outside of business hours.”

Laurent Descout, Founder and CEO of Neo, added: “The move in Europe to ensure euro money transfers arrive within ten seconds can enable merchants and corporates to optimise their liquidity, resulting in more efficient cash management. It means businesses can also lower their transaction and working capital costs through a reduced settlement lag and smoother reconciliation process.

“This new regulation is ultimately good news for European consumers and businesses, as it means there will be greater convenience and choice. Instant cross-border payments for corporates will help simplify access to many more markets with considerable chances of scaling and growing businesses.

“With the right partners, businesses of all sizes will be able to benefit from new technology to improve their treasury operations and reap the rewards of instant payments.”