Reuters has reported that the European Union is preparing legislation that would force banks in the Eurozone to offer their customers instant transfers and payments denominated in the common currency, the Euro.
According to the drafts of the new regulations, only 11% of all Euro transfers were transacted as euro instant payments.
The draft of the new regulation states that: “Payment service providers (PSPs) that provide credit transfers in Euro will be required to offer the service of sending and receiving IPs in Euro. The requirement would cover 24 hours a day, 365 days a year.”
The draft is expected to be published towards the beginning of November and then move on to the euro area member-states and European Union Parliament for ratification.
Payment Service Providers (PSPs) would have to be ready to receive instant Euro payments in the Eurozone within six months of the ratification, with the time scale for sending instant payments rising to twelve months from the date of ratification.
The figures for instant payments through Eurozone banks must catch up to other regions and transfer methods. For example, in the USA, almost 45% of consumers sent or received an instant retail payment in one form or another. In the UK, the figures are even higher, with over 50% of transfers being real-time payments.
Regulated banking alternatives like Revolut have been offering instant payments for over twelve months, a feature that was one of the main drivers in the considerable increase in their user base.
Instant payments make sense, and the EU has struggled to keep up with the dominance of the big US payment systems, like Visa and Mastercard. The bloc’s first attempt, the European Payments Initiative (EPI), was short-lived, as over half the member banks abandoned the project soon after it was launched.