Only 11% of all euro transfers in the EU today are instant. One out of every three payment service providers does not accept euro instant payments. Even at this low level of uptake, the picture is very different between countries, said Executive Vice-President Valdis Dombrovskis in charge of an Economy that works for People, and Commissionner for Trade at the press conference on the Commission’s proposal for a regulation on instant payments on Wednesday.
The world’s payment industry is already making a large-scale move to instant. Europe needs to keep up, added Dombrovskis: “To remain globally competitive and to make the most of the opportunities provided by the digital age. This is what we aim to achieve with today’s proposal. We want to make instant euro payments available to anyone in the EU with a bank account – individuals as well as businesses.”
“Today, we are proposing that any EU bank that offers euro money transfers will have to offer customers their instant version as well. In addition, payment providers must not charge more for instant payments than for traditional transfers. As with any new technology, security is paramount. To protect against mistakes or fraud, and also to strengthen trust in instant payments, providers must check whether the name of the beneficiary matches the bank account number,” said Dombrovskis.
“Today, nearly two-thirds of EU businesses maintain a cash contingency to cover the time it takes to receive payments. And operational costs are lower for merchants who accept instant payments for their goods and services. Then, for EU banks and fintechs, instant payments offer more opportunities to innovate, attract new clients and compete with large international players. They can use instant payments as a springboard to develop new services and products such as mobile payment apps. This type of credit transfer releases funds locked in the ‘back-office’ of the financial system. The ‘payment float’, as it is called, on any given day amounts to almost €200 billion. Once freed up, it can be put to productive use in spending and investment – and contribute to Europe’s economic growth. Today’s initiative aims to give instant payments a much-needed boost across the EU.”
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