Payments body proposes system for enabling instant payments

Out-Law News | 12 Apr 2016 | 5:20 pm | 1 min. read

A new framework for enabling instant credit transfers has been proposed by a European payments trade association.

The European Payments Council (EPC), which represents payment service providers (PSPs), said the scheme would see money transferred between accounts within 10 seconds.

The instant credit transfers system would apply within the Single Euro Payments Area (SEPA) and represents a "response to European customer needs for faster payments", it said.

"It will be a turning point in making pan-European instant credit transfers in euro a reality," the EPC said.

Only PSPs with the technical capability to process SEPA credit transfer instant (SCT Inst) payments "on a 24/7/365 basis" will be able to participate, it said. Participation in the scheme will be optional.

The EPC has opened a three month consultation on its proposals, which includes draft rules that will govern how instant credit transfers should be facilitated.

"The scheme is based as much as possible on the existing SEPA credit transfer scheme and still includes many of its successful features," the EPC said. "This has been designed to facilitate a faster and cheaper implementation for scheme participants."

Initially payments of up to €15,000 will be able to be processed via the instant credit transfers system, although banks and other PSPs will be free to put in place bilateral or multilateral agreements to stipulate higher or lower maximum transaction values and speedier execution times.

The EPC's consultation closes on 10 July.

"The EPC will review the comments received during the public consultation, in close collaboration with stakeholder representatives," it said. "The finalised scheme rulebook will be published by the EPC in November 2016 and will be implemented one year later. In November 2017, all live scheme participants will be ready to propose the first SCT Inst transaction solutions based on the finalised EPC SCT Inst scheme to their customers in Europe."

"The short period between the publication of the scheme and the first SCT Inst transactions demonstrates the payment industry’s confidence in PSPs to adapt well to customers’ needs, and quickly implement major changes," it said.