EU mandates 10-second money transfers from 2025

Efe Udin

December 27, 2024

A sweeping reform in European banking will revolutionize money transfers from January 2025. Under the new EU Regulation 2024/886, financial institutions in the Eurozone must enable real-time transfers for euros within ten seconds, ushering in a new era of seamless transactions.

Instant payments for all

This regulation, commonly referred to as the “Instant Payment Regulation,” mandates that banks and savings institutions across the 38 SEPA countries, including EU nations, Switzerland, Norway, and Iceland, offer 24/7 instant incoming transfers without additional costs. Outgoing real-time money transfers are also included but have a transitional period until October 2025, after which fees for such services will no longer be allowed.

Currently, only about 11% of euro transfers in the EU are conducted in real-time. The initiative seeks to modernize the European single market, increase efficiency, and expand access for end consumers to faster, fee-free payment options.

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Safety comes first

While speed is a highlight of the regulation, security remains paramount. Banks need to implement fraud-prevention systems, including free and immediate identity verification for recipients. Customers will also have the ability to set individual maximum limits for instant transfers, adding another layer of security to the system. However, ensuring safety at the speed of real-time transactions presents challenges. Usual fraud checks during transfers can’t work here. Instead, banks need to scan their full user lists each day against EU sanction lists to cut risks well.

The Instant Pay law will ease money tasks for both users and firms. Fast transfers will cut delays in moving funds, even across borders in the SEPA zone. This is a big deal for firms that rely on quick pay or users who need funds at once. By cutting extra fees for quick sends, the EU hopes to build a fairer system. Users will skip extra costs for fast pay, boosting the use of real-time sends and making banking more fair for all.

This new rule shows the EU’s drive to boost the speed and reach of its money systems. Though banks will face tough work and safety needs, the gains for the EU and users will likely be worth it. By 2025, fast sends will be the rule, a big step for the Eurozone’s money world.

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