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Members of the European Parliament (MEPs) debated the Instant Payments Regulation (IPR) on Monday (February 5), which is due to be voted on during a plenary session on Wednesday with various factions signalling support for its passage.
“Some files test all our patience and nerves,” said the European Commission’s finance chief, Mairead McGuinness. “Thankfully, not this one.”
McGuinness' words show just how easy the process of passing the regulation, first proposed in October 2022, has been.
This is in spite of the fact that it will mean banks having to overhaul systems and some undoubtedly losing revenue from the premiums that they are used to charging on instant credit transfers.
MEPs even managed to get the Settlement Finality Directive (SFD) amended via the legislation, which will mean that payment and e-money firms get access to payment systems after much campaigning by trade associations such as the European Digital Payments Industry Alliance and the European Fintech Association.
As one source recently pointed out, MEPs are keen to be able to take wins back to their constituents as we veer towards the European Parliament’s election between June 6 and 8.
Unlike the often highly technical legislative files that come out of Strasbourg and Brussels, the IPR is perhaps more digestible for the average voter than other financial services regulation.
“With the agreement on instant payments, we have the opportunity to do something that businesses and people truly care about,” said Michiel Hoogeveen, the MEP that has been responsible for leading the IPR’s negotiations for the parliament.
Hoogeveen, who has since taken up the mantle as the European Parliament’s rapporteur for the open finance framework, continued to describe the IPR as “not some abstract plumbing of the financial system, or super technical capital requirements, instead, this is something very concrete and something that Europeans truly care about”.
“Our payment transaction system is based on a system from the 1980s,” he said. “We are finally entering the 21st century.”
His words were echoed around the plenary session, with centre-right MEP Markus Ferber commenting that the legislative file is “making a huge contribution to the payments of the future”.
Meanwhile, Marek Belka, the MEP charged with leading negotiations for the Payment Services Package, described the legislation as “showing how the common market can function”.
He even went on to add that the IPR shows that eurosceptic figures in the EU, such as Hungary leader Viktor Orbán and Dutch politician Geert Wilders “are wrong. Europe is working.”
The debate did, however, bring up some criticism from MEPs, with one representative of the far-right Identity and Democracy Party saying that it “does nothing to lower our dependency on the US”.
Meanwhile, left-wing Irish MEP Mick Wallace said that he was concerned about some of the security issues with instant payments, and that he was disappointed at the lack of investigation into energy consumption in the legislative file.
He signed off his speech by saying “cash is king, and I hope it stays that way”.
