Instant payments: the benefits for customers and business | Topics | European Parliament (2024)

FAQs

What is the instant payment regulation in Europe? ›

The Instant Payments Regulation (IPR) is a new European Union legislation that requires all payment service providers (PSPs) to offer the possibility to send and receive euro payments within seconds, 24/7, across the EU.

The ECB continues to encourage market participants to develop and implement instant payment end-user solutions at a pan-European level and to support their uptake.

On 26 October the European Commission (EC) adopted a legislative proposal on instant payments in euro, fulfilling its commitment to the 2020 Retail Payments Strategy for the European Union (EU). This proposal has been adopted by the EU Parliament on February 7th, 2024. The full text of the regulation can be found here.

Instant payments allow people and businesses to pay and receive payments more conveniently and efficiently. With instant payments, people can easily split a restaurant bill with friends and receive funds immediately. Businesses, especially small and medium-sized companies, can exert more control over their cash flow.

Maximum payment terms cannot be longer than 60 days unless expressly agreed by both parties and not grossly unfair. Where no terms are specified the default is 30 days.

TIPS is a harmonised and standardised pan-European service with common functionalities for the settlement of Instant Payments across different countries and jurisdictions. It is based on the Single Euro Payments Area (SEPA) Instant Credit Transfer scheme.

A well known use case is the transfer of funds via mobile phone between friends to split a bill at a restaurant.

Instant payment systems enable consumers, businesses, and financial institutions to transfer money between bank accounts in near real-time. This means organizations can improve their liquidity and cash flow, as funds are transferred in seconds, rather than having to wait hours or even days for funds to clear.

Key Differences Between SEPA and SEPA Instant

SEPA payments typically take up to 2 business days to process, while SEPA Instant payments are processed within 10 seconds. This makes SEPA Instant a much faster option for time-sensitive transactions, such as urgent bill payments or e-commerce purchases.

The Council and the European Parliament have reached a political agreement on the instant payments proposal, which will improve the availability of instant payment options in euro to consumers and businesses in the EU and in EEA countries.

What is the European Commission payment strategy? ›

The retail payments strategy for the EU aims to further develop the European payments market and lessening Europe's dependency on big global players in this area by reaping the benefits from innovation and the opportunities that come with digitisation.

The European procedure for an order for payment, instituted by Regulation (EC) 1896/2006, is a simplified procedure by which any citizen (and also any enterprise) can recover an uncontested financial credit, in other words a sum both liquidated and due (in other words the amount must be determined and not subject to ...

Instant Pay allows employees to access up to 50% of their daily earned pay. Upon completion of their shift, an employee receives a notification on their smart phone through the Instant Financial app that their pay is available for them to claim.

There are two main types of instant payments: credit payments, where money is pushed to another account, and request for payment (RfP), where money is pulled from an account after a request is made. These are also called 'payouts' and 'payins'; see below.

To facilitate payments from US-domiciled accounts to accounts in other countries, an International ACH Transfer (aka Global or Cross-Border ACH) utilizes the local equivalents of ACH in different regions. This includes EFT in Canada, SEPA in Europe, BACS in the UK, or BECS in Australia.

The instant payments regulation will allow people to transfer money within ten seconds at any time of the day, including outside business hours, not only within the same country but also to another EU member state. The regulation takes into consideration particularities of non-euro area entities.

The European Parliament passed a regulation mandating that transfers must occur within ten seconds. Learn how financial institutions are adapting.

The Payment Services Directive (PSD2) empowers the Commission to adopt delegated and implementing acts to specify how competent authorities and market participants shall comply with the obligations laid down in the directive.