One of the aims of the EU Commission is to increase competition and efficiency in payment transactions in the EU.
(Photo: dpa)
Frankfurt, Brussels The EU Commission wants to make real-time transfers the standard – and banks to make corresponding specifications. It aims to ensure that all credit institutions have to offer instant payments. In addition, real-time transfers should not be more expensive than a standard Sepa transfer, which is usually free. This emerges from the draft regulation of the Commission, which is available to the Handelsblatt.
For transfers in real time, also known as instant payments, there has been a Europe-wide set of rules for around five years. Real time means that the amount is credited to the recipient’s account within ten seconds. Normal transfers usually take one working day.
So far, however, real-time payments have been little used – far too little from the Commission’s point of view. According to the draft regulation, instant payments accounted for eleven percent of all euro transfers in the EU in the first quarter.
A third of the payment service providers in the EU therefore do not offer real-time payments. And the pace at which the number of providers is growing is too low, “which hinders the further integration of a uniform payment market in the EU”.
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Most German banks and savings banks offer instant payments as an option. The super-fast transfers often cost extra, often 50 cents or one euro. Since you don’t need real-time payments in everyday life, they are also rarely used.
Instant payments could replace card payments
One of the aims of the EU Commission is to increase competition and efficiency in payment transactions in the EU. Before the regulation can come into force, it must be coordinated with the member states and the EU Parliament.
Instant payments are considered an innovative technology. So far, however, there is no groundbreaking and accepted innovation in the industry based on real-time payments. However, Sebastian Maus, partner at the consulting firm Roland Berger, expects “new use cases and business models that we can already observe internationally”.
For example, card payments at the cash register could be replaced by the direct execution of the transfer. “For companies, there are advantages in reconciling incoming payments, a process that is still very time-delayed and manual today.”
Banks that have joined forces to form the European Payment Initiative (EPI) also see real-time transfers as a basis. However, the original EPI goal of creating its own new payment system including a new payment card was discarded. The intention was that European financial institutions should become more independent of powerful US corporations such as Mastercard, Visa and Paypal.
The CSU MEP Markus Ferber also sees a boost for instant payments as positive: “Today it is simply no longer up to date if we have to measure payment processing in days and hours. The fact that real-time payment processing is becoming the new standard is a win for consumers,” he told Handelsblatt.
However, Ferber warned that it must be ensured “that consumers enjoy the same consumer protection and security standards as with regular Sepa payments”. It is therefore considered important that consumers can recall faulty instant payments within a certain period of time if necessary.
More: “Buy now, pay later”: EU plans stricter rules for online shopping on credit