Banks operating in the euro zone would have to mandatorily offer ‘instant payments‘ in euros round-the-clock, as per the draft European Union rules, reported Reuters, which has seen the document.

These rules are intended to modernise payments to enable the transfer of money from one account to another in a matter of seconds, 24/7, as against the current card payments and direct deposits that can last up to many business days.

The new rules are a part of EU’s policy of “fostering the development of competitive home-grown and pan-European market-based payments solutions”.

In the cross-border retail payments segment, the bloc is currently dominated by US entities – Mastercard and Visa.

Although currently there exists an infrastructure in the euro area for instant payments (IP), its adoption has been slow, with just about 11% of euro credit transfers happening in the form of IP at the end of 2021, the European Commission stated in the draft instant payments law.

“Payment service providers (PSPs) that provide credit transfers in euro will be required to offer the service of sending and receiving IPs in euro. The requirement would cover 24 hours a day, 365 days a year,” the draft stated.

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The finalised draft law is expected to be published today. The EU states and the European Parliament will have the final say and further changes may be made to the draft.

As per the draft, a mandatory deadline has been set for PSPs to receive instant payments in euros in the euro area in six months once the new rules become effective.

On the other hand, PSPs would have to be able to send euro denominated instant payments within 12 months.

However, banking entities outside the euro area would have longer time to comply.

According to the draft law proposal, a cross-border euro instant payment is required to be priced at the same or even at a lower level than the corresponding cross-border euro credit transfer.