‘Seismic shift’ in bank payments to help businesses and consumers, says EU
By Huw Jones
LONDON, Oct 26 (Reuters) – Forcing European Union banks to offer instant payments in euros is a “seismic” change to make the economy more efficient and save money for businesses and customers, the government said on Wednesday. the bloc’s chief financial officer.
Mairead McGuinness has proposed a European bill that will force banks in the 27-nation union to offer and receive ‘instant payment’ (IP) services for the same or lower fees as they charge for wire transfers traditional.
Currently, some banks charge significantly more for an IP transfer, up to 30 euros ($30) in some cases, compared to traditional transfers.
“Moving from ‘next day’ transfers to ’10 second’ transfers is seismic and comparable to going from mail to email,” McGuinness said in a statement.
Instant payments have been rolled out in many parts of the world, including the EU, but voluntary adoption in the bloc has leveled off, with only two-thirds of banks offering the IP, representing only 13% of all credit transactions.
The American duo Visa and Mastercard dominate cross-border card payments, and Brussels hopes that intellectual property, combined with reforms such as “open banking”, or fintechs using a customer’s bank details to offer a range of services, will stimulate competition.
Intellectual property is part of helping broader reforms, such as the planned digital euro.
“By mandating instant payments, the major barriers to open banking payments that are becoming mainstream are instantly addressed,” said Tom Greenwood, CEO of instant payments gateway Volt.
IP allows people to receive and make instant payments 24/7, which is essential if payday falls on a weekend, and businesses to manage their cash flow by receiving funds instantly after a sale.
Once in force, the proposed law, which must be approved by EU states and the European Parliament, would require eurozone banks to receive euro IP addresses within six months and the possibility of send euro IP addresses within one year, with banks elsewhere in the EU having 24 months to offer euro IP services.
“This will increase competition in payment services and provide consumers and merchants with an additional, efficient and lower-cost choice for paying for goods and services both in-store and online,” said Christel Delberghe, Chief Executive Officer. of EuroCommerce, which represents the retail and wholesale trade. sector.
Banks will have to check their IP customers daily against the most up-to-date EU sanctions list, which has grown since Russia invaded Ukraine.
Currently, non-bank payment companies are excluded because they do not have direct access to payment systems, but Brussels plans to revise its rules to allow them to compete with banks in IP payments, a source said. the EU.
($1 = 0.9983 euros) (Reporting by Huw Jones; Editing by David Holmes)