Incoming! McGuinness Confirms Instant Payment Regulation

February 10, 2022
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In the second half of 2022, the European Commission will set out its plans for instant payments legislation, the commission’s financial services chief has announced.

In the second half of 2022, the European Commission will set out its plans for instant payments legislation, the commission’s financial services chief has announced.

“Today I’m confirming the Commission will present a legislative initiative on instant payments in the second half of 2022,” Mairead McGuinness, Ireland’s EU commissioner, wrote in a post on LinkedIn.

She continued: “We need this to accelerate the roll-out of instant payments in the EU.”

Instant payments are a significant part of the EU’s ambitions for payments sovereignty in the trading bloc.

In December 2018, the European Commission said that it supported “a fully integrated instant payment system in the EU, to reduce the risks and the vulnerabilities in retail payment systems and to increase the autonomy of existing payment solutions”.

However, instant payment overlay schemes and services in the EU have often remained domestic, such as iDEAL in the Netherlands and Bizum in Spain.

At the moment, there are several initiatives being pursued through the work of the Euro Retail Payments Board (ERPB), managed by the European Central Bank, and the European Payments Council (EPC), which are aimed at adopting common European schemes and rules.

The commission said in its EU Retail Payments Strategy in 2020 that these “should eventually facilitate the emergence and interoperability of instant payment solutions in shops and e-commerce”.

Instant payments played a key role in the EU’s thinking, with one of its four key pillars of its strategy aiming for “increasingly digital and instant payment solutions with pan-European reach”.

In this pillar, the commission also committed to making a decision on whether to propose legislation requiring payment service providers’ adherence to the SCT Inst Scheme by the end of 2021.

At the time, the strategy also dictated that Brussels would lay down the criteria for determining which payment service providers (PSPs) should be subject to obligatory participation in the scheme.

Today’s announcement is likely to be received positively by the EU’s payments players. So far, take-up has lagged depending on the member state, and the commission’s ambition in 2021 of instant payments becoming “the new normal” did not take off.

According to the European Payments Council, roughly 10 percent of SEPA credit transfers across the EU were instant payments in 2021, while 60 percent of Europe's PSPs had joined the scheme.

What happens now remains to be seen, but McGuinness’ announcement is a sign that the revised Payment Services Directive (PSD2) review will be separate to any instant payment legislation.

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