The move to instant payments – is it really such ‘a seismic switch?’

The European Commission published a proposal on instant credit transfers in euro in October 2022. The proposal will in practice mean that money being transferred from one account to another should be received by the recipient within a matter of seconds at any time of the day, every day of the year. The Commission argues that this will bring numerous benefits to consumers and businesses, and will promote innovation in financial services. 

But it will also come with several challenges for Payment Service Providers (PSPs), particularly in the short run. In the long run however, the benefits linked to innovation, user experience and cost reduction should outweigh the costs of implementing IPs.

Fredrik Andersson is a researcher in ECRI and the Financial Markets and Institutions Unit at CEPS.