On 7 February 2023, the European Central Bank (ECB) published an opinion on a proposal for a Regulation amending Regulations (EU) No 260/2012 and (EU) 2021/1230 as regards the instant credit transfers in euro.
The proposed Regulation is intended to make instant payments in the Euro currency available to citizens and businesses holding a bank account in the European Union (EU) and in EEA countries. The draft Regulation was announced in the European Commission’s 2022 Work Programme. It was eventually adopted by the Commission on 26 October 2022.
The opinion makes the following general observations:
- The ECB strongly welcomes the Commission’s initiative to promote the provision and uptake of instant payments (IPs), defined as credit transfers that transfer funds to the payee’s payment account within ten seconds after the time of receipt of the payment order from the payer.
- In order to promote the smooth operation of payment systems, it is essential to address fragmentation issues across the Single Euro Payments Area (SEPA). Currently the provision of IPs is not available in all SEPA jurisdictions on an equal footing.
- The provision and uptake of IPs have grown in the EU since the launch of the SEPA Instant Credit Transfer scheme in 2017, but they have not yet become the new norm, as could have been expected.
- The ECB notes the exclusion of electronic money institutions and payments institutions, which would otherwise be required to offer all of their payment services users a payment service for sending and receiving IPs, as they cannot participate in the settlement systems designated under the Settlement Finality Directive.
- The ECB supports the requirement for the affected payment service providers to offer IPs at the same cost as non-IPs. The ECB also welcomes the introduction of a simplified sanction screening process to overcome the current transaction-based model, without lowering the effectiveness of sanctions screening.
- The ECB supports the proposed introduction of a service for detecting discrepancies between the payee’s international bank account number and name.