European Commission Proposes Instant Payments as New Standard in Europe

The European Commission has proposed making instant payments the new norm, requiring payment service providers to offer them at no extra cost alongside ordinary credit transfers. Instant payments are a payment scheme that requires transactions to be completed within ten seconds from initiation, regardless of time or day. Since November 2017, payment service providers across Europe have been able to join the SEPA Instant Credit Transfer scheme, which enables them to send and receive instant payments. The scheme requires adequate market infrastructures, such as payment systems, to process instant payments. The Eurosystem and EBA Clearing have developed Target Instant Payment Settlement and RT1 infrastructures respectively, to make pan-European instant payments possible. However, these systems do not yet allow for instant cross-border payments in euro. In order to fully realize the benefits of instant payments, widespread adoption is needed, as the network effect in the payments market is strong. Therefore, the proposed regulation aims to support the emergence of instant payments as a new standard in Europe.