Iberpay News
Instant Transfers
February 05 2024
The great potential of instant credit transfers
The new European Regulation on Instant credit transfers, approved by the European Parliament on 7 February, seeks to generalise their use among citizens, companies and public administrations, by establishing the obligation for banks and payment service providers (PSPs) to offer instant credit transfers to their customers, both individuals and companies, through any channel, for many use cases, at any time and at the same than classic transfers. In addition, it promotes measures aimed at fighting against fraud, such as the obligation to offer a service to validate the name of the beneficiary to be used by customers before sending a payment.
With this regulation, Europe seeks to exploit the full potential of instant credit transfers to achieve its strategic objectives in terms of payments:
- Sovereignty and strategic autonomy from other economic areas through the development of its own payment solutions on a pan-European scale,
- Accelerate the speed of money circulation to improve the efficiency of the economy and stimulate growth,
- Facilite the digitalisation of the European economy,
- Promote innovation, competition and sustainability in payment services,
- Ensure the resilience of payment systems with complementary and alternative solutions to card networks, and
- Improve international payments with currencies other than the euro.
Although Spain leads the adoption of instant credit transfers in Europe, their use are still very concentrated in the Bizum service and in low-value payments between individuals. However, in the field of companies (payment of invoices to suppliers, collections from customers, payrolls, expenses, etc.) or Public Administrations (pensions, fees, subsidies, fines, taxes, etc.) their implementation is still much more limited.
As companies learn about the benefits that instant credit transfers will bring with regards to optimizing their cash flows, making payments and collections at any time of the day and every day of the year, automating the entire value chain of their payments and collections through end-to-end APIs (communication protocols between software applications), instantly reconciling invoices, collections, and bank accounts, etc.
Window of Opportunity
The new era of instant payments opens an unprecedented window of opportunities. The widespread use of these will not only speed up and accelerate the flow of money in the economy, but will also substantially change the payment habits of citizens, businesses and public administrations across Europe (as Bizum has already done in Spain in peer-to-peer payments) and will create an optimal space for digitalisation, financial innovation and competition in payment services, whilst also stimulating economic activity.
Spain is in a privileged stance to continue leading this digital transformation and obtain all the benefits it brings. We are facing a revolution that can reshape the European economy, making it more efficient, digitalised and innovative.
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