European Commission's legislative proposal on instant payments and its impacts
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European Commission's legislative proposal on instant payments and its impacts


European Commission's legislative proposal on instant payments and its impacts

Sheri Brandon

Chief Market Officer Northern & Western Europe

European Commission's legislative proposal on instant payments and its impacts

Since its launch in Europe in November 2017 from the European Payments Council (EPC), instant payments has proven its potential far-reaching benefits to all market participants in the EU. However, the full-scale benefits have yet to be realized. As a founding member of both the European Digital Payments Industry Alliance (EDPIA) and the Open Finance Association (OFA), Worldline welcomes the European Commission’s legislative proposal on instant payments, released on October 26, 2022, that contributes to facilitation of the emergence of competitive home-grown and pan-European payment solutions. Worldline actively contributes to the legislation through public consultations and market exchanges.

The legislative proposal of the European Commission contributes to its key objectives within the payments landscape, which are supported by Worldline services and products - the delivery of seamless, secure payments in a sustainable and innovative manner, contributing to trusted domestic and cross-border transactions for European citizens and companies. Worldline welcomes the initiative of the Commission to reduce barriers to the deployment of safe, convenient and fast cross-border payments, promoting the use of digital payments for the benefit of society as a whole.

The legislative proposal is built on four main pillars as follows. These pillars should effectively address the needs of the market on bank, merchant and consumer level.

1.     Mandatory uptake of instant payments in euro, as per the obligation of payment providers that offer regular credit transfers in euro to also offer their instant version within a defined period

2.     Affordability of instant payments in euro, as per the obligation on payment providers in not exceeding the price charged for a traditional, non-instant credit transfer in euro for instant payments in euro

3.     Increase of trust in instant payments with an obligation on payment providers to verify the match of IBAN with the name of the beneficiary as a measure to reduce fraud

4.     Removing friction in the processing of instant payments in euro via daily sanctions screening for users as opposed to transaction screening

Worldline expects the legislative proposal to make it through the negotiation process before April 2024, when the next European Parliament elections take place. Banks must adhere to the initial instant payments obligations within six months after the entry into force of the legislation. At this time, all banks in the Euro area must be able to receive instant payments. In this six-month timeframe, the charges and sanction screening obligations of instant payments must also be met. Within twelve months of enforcement of the legislation, all banks in the Euro area must also be able to send instant payments. In this twelve-month timeframe, the IBAN matching service must be offered in conjunction with the sending of instant payments.

A well-integrated payments market, with competitive and innovative instant payments, can offer vast potential benefits to all and serve the whole of the single market. It is instrumental in responding to new payment needs in the EU.  The already engaged consideration of a possible amendment of the Settlement Finality Directive (SFD), which would allow to extend the scope of the current proposal on instant payments to payment institutions and electronic money institutions, will further accelerate the adoption of instant payments as a retail payment method.

Worldline looks forward to continuing the discussions on the legislation with stakeholders and decision-makers, as well as providing its end-to-end instant payments services as part of the current market evolution.

From payment initiation and channel solutions that directly benefit the end customer to back-office processing and clearing & settlement, Worldline has the unique capability to cover the whole value chain for instant payments or in combination for example with open banking.

For legislative and policy inquiries, please contact Emőke Péter, dep. Head of Public and Regulatory Affairs. For business inquiries, please contact us.