Prepared by Fabrizio Cascinelli, Luca Bettinelli
On March 19, 2024, has been published in the Official Journal of the European Union Regulation (EU) 2024/886 of the European Parliament and of the Council of March 13, 2024, amending Regulations (EU) No. 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366 as regards instant credit transfers in euro and will enter into force on April 8, 2024 (“Instant Payment Regulation“).
The new rules, which aim to ensure the immediate availability of funds transferred by credit transfer, are in line with the provisions of the “Retail Payment Strategy,” included in the Digital Finance Package published by the Commission in September 2020.
The new features introduced by the Regulation mainly affect Regulation (EU) No. 260/2012 (“SEPA Regulation”), which contains general provisions for all credit transfers and direct debits in euros, adding specific provisions for instant payments in euros.
With regard to the immediacy of the transfer of funds, it was established that all payment service providers (“PSPs”) will be required to make available to customers twenty-four hours a day, seven days a week the instant credit transfer service, ensuring that transactions are executed within ten seconds of the order, with the immediate availability of funds to the beneficiary within that time.
Secondly, the regulations establish that the cost of instant credit transfers in euros shall not be higher than that of traditional transfers. Finally, with regard to the security of instant credit transfers, there are substantial anti-fraud provisions that PSPs will be required to implement, including:
- Verification of the payee: PSPs will have to implement specific procedures to enable the identification of the recipient of an instant transfer by the payer before completing the transaction (so-called iban-check); they will also have to provide a verification system for multiple payment orders;
- Possibility of setting a maximum amount for instant fund transfers: PSPs will have to allow payers to set a maximum limit for instant transfers. If online account credentials are stolen, this limit will reduce the risk of account emptying through fraudulent transfers;
- Screening: PSPs are required to follow a harmonized approach so that EU sanctions can be enforced without the overlaps, inefficiencies, and resulting disruptions due to divergent screening processes applied by PSPs. Therefore, PSPs are required to check at least once a day whether their customers are designated persons or entities subject to EU sanctions and, in any case, immediately after the entry into force of any new or changed financial restrictive measure.
PSPs will have to comply with the new provisions within a period ranging from 9/18 to 33/39 months, depending on whether they are located in the Eurozone or not.
Read here the Regulation (EU) 2024/886 of the European Parliament and of the Council of 13 March 2024 amending Regulations (EU) No 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366 as regards instant credit transfers in euro