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EU reaches provisional agreement on Instant Payments Regulation

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On 7 November 2023, the European Parliament and the Council of the EU reached a provisional agreement on the new Instant Payments Regulation . This step marks the end of negotiations on this important legislation, which promotes a fast and efficient way to make payments within the European Union (EU) and European Economic Area (EEA).

Waving flag of the European Union with yellow stars on a blue background, symbolizing European cooperation and regulation.

The new rules are expected to enter into force in the first quarter of 2024. The Regulation is intended to make instant euro payments accessible to all citizens, businesses and institutions in the EU and EEA. It will help ensure that Instant Payments can be processed affordably, securely and without barriers.

The Dutch Payments Association has actively contributed to this process. It published two explanatory documents for its members covering the background to the legislative proposal and the next stages of the process. The Dutch Payments Association also submitted a written response to the European Commission’s original proposal.

Illustration about instant payments.

Key points of the Instant Payments Regulation

The final text has not yet been published, but the following main points are already known:

  1. Mandatory for payment service providers: EU payment service providers that offer SEPA credit transfers will also be required to offer Instant Payments. Strict implementation deadlines have been set.
  2. Rights for payment institutions and electronic money institutions: Non-bank payment service providers will gain direct access to payment systems for Instant Payments and regular SEPA credit transfers, such as TARGET2 and TIPS, rather than having to access them through a bank.
  3. Same fee as a regular credit transfer: Fees for Instant Payments may not be higher than those for conventional SEPA credit transfers.
  4. Always-free IBAN Name Check: Known in English as Verification of Payee, this service must be offered free of charge for digital credit transfers, both for Instant Payments and conventional SEPA credit transfers.
  5. Harmonised sanctions screening: Providers of Instant Payments must follow a harmonised procedure for checking applicable sanctions.

Future legislation

Finalisation of the Instant Payments Regulation will also affect the Payment Services Regulation (PSR) and Payment Services Directive (PSD3). This includes obligations concerning Verification of Payee for conventional SEPA credit transfers.

Information session in January 2024

The Dutch Payments Association will organise an information session about the Instant Payments Regulation in early 2024. The session will focus on its impact on banks, payment institutions and electronic money institutions, as well as the approach needed to meet the obligations.

This provisional agreement between the European Parliament and Council is an important step towards more efficient and accessible European payments and is highly relevant to institutions and businesses.

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