The European Union is set to revolutionize cross-border payments by introducing super-fast transfers for all consumers and companies. This change comes after the European Parliament passed a regulation that requires financial institutions offering transfers in euros to provide instant transfers, allowing customers to transfer money to an account in another Member State within ten seconds, at any time, with costs no higher than traditional transfers.
To further enhance security, providers must also verify that the bank account number (IBAN) provided by the payer matches the name of the beneficiary within ten seconds. This will help prevent errors or fraud and increase confidence in cross-border transactions.
While instant transfers are already possible within the EU on a voluntary basis with varying levels of implementation from country to country, Belgium is leading the way with over 20% of all individual transfers being made instantly. However, banks still face operational challenges as they move towards implementing this regulation.
The regulation has been agreed upon by the Member States and they have twelve months to implement it. Member States where the euro has not been introduced will have a longer transition period to apply the rules for their financial institutions that offer regular transfers in euros.
This move towards super-fast payments will make it easier for businesses to operate in foreign markets and individuals to share expenses with friends in other European countries, paving the way for greater economic integration and growth within the EU.