In an effort to streamline cross-border transactions and enhance consumer confidence, the European Union has adopted a regulation that requires financial institutions offering euro transfers to also provide instant transfers. This means that clients will be able to transfer money between accounts in different member states within ten seconds, at any time, and without incurring higher costs than traditional transfers.
In addition to instant transfers, providers must also verify the accuracy of the IBAN provided by the payer and match it with the user’s name within ten seconds. This will help prevent errors or fraud and increase security in cross-border transactions.
While instant transfers are already available within the European Union on a voluntary basis, with varying levels of implementation from country to country, this regulation will ensure consistency across all member states. Belgium is currently leading the way in this area, with over 20% of all individual transfers taking place. However, there are still operational challenges that banks must overcome as they implement this regulation.
The regulation has been adopted by member states and they have twelve months to implement it. Member States where the euro has not been introduced will have a longer transition period to apply the rules for their financial institutions that offer regular transfers in euros.
This move towards super-fast payments will make it easier for businesses to operate in foreign markets and for individuals to share costs with friends in other European countries, ultimately enhancing economic integration within the EU.