The European Commission on Wednesday adopted a legislative proposal to make instant payments in euro available to all citizens and businesses holding bank accounts in European Union and European Economic Area countries.
Such payments allow money to be transferred from one account to another in a matter of seconds rather than hours or even days with a traditional transfer, which depends on working days.
Almost €200 billion euro are locked in transit in the financial system on any given day, the Commission said in a press release. This so-called ‘payment float' is money that can be used sooner for consumption or investment, it said, noting that this was a matter of competitiveness and making the best use of technological advances.
Speaking at a press conference on Wednesday, Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets, said that according to some estimates, "it could take a decade for instant payments to become the norm” if left to the markets.
The proposal adopted by the Commission stipulates that payment-service providers who already offer euro transfers in the EU must in future also offer instant transfers, without making them more expensive than traditional ones.
At present, the take-up rate varies greatly between European countries, said Commissioner for Trade Valdis Dombrovskis. He added that, in most countries, instant payments cost more than a traditional transfer, and this must change.
The Commission estimates that only 11% of all euro transfers in the EU were instantaneous as at the start of 2022. To increase security, banks should, at the time of an instant transfer, warn the consumer if the account number does not match the name given as beneficiary.
