Regulation (EU) 2024/886 of the European Parliament and of the Council of 13 March 2024 amending Regulations (EU) No 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366 as regards instant credit transfers in euro (Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee (1),

Having regard to the opinion of the European Central Bank (2),

Acting in accordance with the ordinary legislative procedure (3),

Whereas:

(1) Regulation (EU) No 260/2012 of the European Parliament and of the Council (4) provides the foundation for the single euro payments area (SEPA). To create favourable conditions for increased competition, in particular for payments at the point of interaction (POI), the SEPA project should be continuously updated to reflect innovation and market developments in payments, promote the development of new Union-wide payment products, and facilitate access for new market entrants.

(2) In 2017, a Union-wide scheme for the instant execution of credit transfers in euro was agreed between payment service providers (PSPs) under the auspices of the European Payments Council. The efforts of the European payments industry have not proven sufficient to ensure a high uptake of instant credit transfers in euro at Union level. Only a widespread and rapid increase in such uptake could unlock the full-scale network effects of instant credit transfers in euro, leading to benefits and economic efficiency gains for payment service users (PSUs) and PSPs, reduced market concentration, and increased competition and choice of electronic payments, in particular for cross-border payments at the POI.

(3) Regulation (EU) No 260/2012 established technical and business requirements for credit transfers and direct debits in euro. Instant credit transfers in euro are a relatively new category of credit transfers in euro which emerged on the market only after the adoption of that Regulation. It is therefore necessary to establish specific requirements applicable to instant credit transfers in euro, in addition to the general requirements applicable to all credit transfers, to ensure the proper functioning and integration of the internal market.

(4) To make instant credit transfers more accessible and to widen their benefits to PSUs, Member States whose currency is not the euro should be able to apply equivalent rules to those laid down in this amending Regulation to domestic instant credit transfers in their own currency.

(5) A number of national regulatory solutions have already been adopted or proposed to increase the uptake of instant credit transfers in euro, including by strengthening the protection of PSUs from sending funds to an unintended payee and by specifying the process of compliance with obligations flowing from restrictive measures adopted by the Union. The differences among those national regulatory solutions pose a risk of fragmentation of the internal market that would result in the increase of compliance costs due to different sets of national regulatory requirements and a more difficult execution of cross-border instant credit transfers. Uniform rules on instant credit transfers in euro, including cross-border instant credit transfers, should therefore be introduced to prevent such obstacles from arising.

(6) Prior to the emergence of instant credit transfers, payment transactions were generally bundled by PSPs and submitted to a retail payment system for processing, clearing and settlement purposes at pre-specified times. However, in retail payment systems currently used to process instant credit transfers in euro, payment transactions are submitted individually and processed round the clock and in real time. To reflect that, it is necessary to amend the definition of the term ‘retail payment system’ in Regulation (EU) No 260/2012.

(7) Ensuring that all PSUs in the Union are able to place payment orders for, and receive, instant credit transfers in euro is a precondition for an increased uptake of such transactions. Currently, at least one third of PSPs in the Union do not offer the payment service of sending and receiving instant credit transfers in euro. Moreover, the rate at which PSPs have been introducing instant credit transfers into their range of services has been, over the last few years, too slow, which hinders further integration of the internal market, undermines the Union’s open strategic autonomy and limits potential benefits for PSUs. Therefore, PSPs providing the payment service of sending and receiving credit transfers in euro to their PSUs should be required to offer the payment service of sending and receiving instant credit transfers in euro to all of their PSUs. That requirement should apply with respect to all payment accounts which PSPs maintain for their PSUs, including payment accounts with basic features referred to in Directive 2014/92/EU of the European Parliament and of the Council (5).

(8) To create an integrated market for instant credit transfers in euro, it is essential that such transactions are processed in accordance with a common set of rules and requirements. An instant credit transfer in euro enables funds to be credited to the account of the payee within seconds and round the clock. The round-the-clock availability every day of the year is an intrinsic feature of instant credit transfers, which should meet specific conditions, including as regards the time of receipt of payment orders, processing, crediting and value dating.

(9) The European Central Bank (ECB) and national central banks, when not acting in their capacity as monetary authorities or other public authorities, should be able to limit the offer of a payment service of sending instant credit transfers in euro to the period of time during which the ECB and national central banks offer the payment service of sending and receiving non-instant credit transfers in euro. The reason to allow that limitation is that it may be necessary in order for the ECB or a national central bank, due to specificities of its internal operational arrangements, to comply with Article 123 of the Treaty on the Functioning of the European Union (TFEU) at all times.

(10) PSPs located in a Member State whose currency is not the euro could have limited access to liquidity in euro outside of business hours. Therefore, it is proportionate to provide for the possibility that such PSPs request the prior permission of their competent authorities to provide the payment service of sending instant credit transfers from accounts denominated in the national currency of that Member State outside of business hours only up to a certain limit per transaction. Competent authorities should be able to grant such permission based on their assessment of a PSP’s access to liquidity in euro.

(11) There exist a variety of payment initiation channels in the Member States through which PSUs can place a payment order for a credit transfer in euro, for example, via online banking, a mobile application, an automated teller machine, a self-service terminal, in a branch or by phone. To ensure that all PSUs have access to instant credit transfers in euro, there should be no difference in terms of the payment initiation channels through which PSUs can place payment orders for instant credit transfers and other credit transfers. Moreover, where it is possible for a PSU to submit multiple payment orders for credit transfers in euro as a package to a PSP, it should also be possible to submit multiple payment orders for instant credit transfers in euro as a package. PSPs should be able to offer all credit transfers in euro initiated by their PSUs as instant credit transfers in euro by default.

(12) Since some payment initiation channels, such as bank retail locations, are not available round the clock, the time of receipt of a paper-based payment order for an instant credit transfer should be the moment when the paper-based payment order is introduced into the internal system of the payer’s PSP, which should occur as soon as such payment initiation channels are available.

(13) Where a PSU submits multiple payment orders for instant credit transfers as a package to its PSP, that PSP should immediately start to unpack that package so as to turn it into individual instant credit transfer transactions. The time of receipt of a payment order for an instant credit transfer submitted in a package of multiple payment orders should be the moment when the ensuing individual instant credit transfer transaction has been unpacked, taking into account any capacity constraints of a retail payment system which have been communicated to the payer’s PSP. Immediately upon unpacking, the payer’s PSP should transmit that individual instant credit transfer transaction to the payee’s PSP. That transmission should occur without prejudice to possible solutions to be provided by retail payment systems which allow for the conversion of multiple payment orders for instant credit transfers as packages into individual instant credit transfer transactions.

(14) Where a payment order for an instant credit transfer in euro is submitted from a payment account that is not denominated in euro, the time of receipt of that payment order should be the moment when the payer’s PSP, immediately after that payment order for an instant credit transfer in euro has been placed with it, converts the amount of the transaction into euro from the currency in which the payment account is denominated.

(15) Payment institutions and electronic money institutions should contribute to facilitating the uptake of instant credit transfers in euro and should therefore be subject to the requirements of this amending Regulation. However, payment institutions and electronic money institutions are not included in the list of entities which fall under the definition of the term ‘institution’ in Directive 98/26/EC of the European Parliament and of the Council (6). Consequently, payment institutions and electronic money institutions are effectively prevented from participating in systems designated by Member States pursuant to that Directive. The resulting inability to participate in such payment systems can impede payment institutions and electronic money institutions from providing instant credit transfers in euro efficiently and competitively. It is therefore justified to amend Directive 98/26/EC in order to include payment institutions and electronic money institutions in the list of entities which fall under the definition of the term ‘institution’ in that Directive, but only for the purpose of defining participants of a payment system.

(16) Payment institutions and electronic money institutions should meet the requirements and respect the rules of payment systems designated by Member States pursuant to Directive 98/26/EC to be allowed to participate in those systems. Given the importance of the potential contribution of payment institutions and electronic money institutions to facilitating the uptake of instant credit transfers in euro, and the importance of restoring the level playing field between banks and those institutions as soon as possible, it is necessary to grant Member States a short deadline for transposing and applying the amendments to Directive 98/26/EC, and appropriate deadlines for applying this amending Regulation to payment institutions and electronic money institutions. In order to ensure a proper level playing field for participants in systems designated by Member States pursuant to that Directive, to maintain the stability and integrity of those systems and to ensure a comprehensive risk management by payment institutions and by electronic money institutions, it is necessary to further elaborate, for payment institutions and electronic money institutions requesting participation and participating in such systems designated by Member States pursuant to Directive 98/26/EC, certain provisions of Directive (EU) 2015/2366 of the European Parliament and of the Council (7). Those provisions concern the safeguarding of users’ funds, governance arrangements and business continuity arrangements. It is anticipated that the amendments to Directive (EU) 2015/2366 will be further reviewed by the European Parliament and the Council when they consider the Commission proposal for a Directive of the European Parliament and of the Council on payment services and electronic money services in the Internal Market amending Directive 98/26/EC and repealing Directives (EU) 2015/2366 and 2009/110/EC and the Commission proposal for a Regulation of the European Parliament and of the Council on payment services in the internal market and amending Regulation (EU) No 1093/2010.

(17) PSUs are very sensitive to the level of charges for substitutable payment methods. The level of charges can therefore steer them towards or away from a given payment method. In national markets where higher transaction-level charges for instant credit transfers in euro have been applied, when compared to charges for other credit transfers in euro, the uptake of instant credit transfers is low. That has prevented the attainment of the critical mass of instant credit transfers in euro that is necessary to realise the full network effects for both PSPs and PSUs. Therefore, all types of charges applied to payers and payees for the execution of instant credit transfers in euro, including per-transaction charges or lump-sum charges, should not exceed such charges applied to the same PSU for corresponding types of other credit transfers in euro. It would be undesirable that PSPs circumvent the aim of that requirement. When identifying corresponding types of credit transfers, it should be possible to use criteria including the payment initiation channel or the payment instrument used to initiate the payment, customer status, and additional features or services.

(18) Ubiquitous instant credit transfers in euro offer opportunities for PSPs to develop new payment solutions, such as mobile payment applications, facilitating the use of instant credit transfers in euro for payments at the POI. Such payment solutions could include additional features or services offered to payers and payees, such as payment initiation, dispute resolution or refunds. PSPs should be able to decide on the charges for such additional features or services on top of the underlying instant credit transfer. An instant-credit-transfer-based payment solution encompassing additional features or services should not be considered to be of corresponding nature to a non-instant credit transfer offered without the same additional features or services. Where it is possible for a PSU to submit payment orders for non-instant credit transfers without any additional features or services, the same possibility should also be available for instant credit transfers in euro. It should be ensured that, from the PSU’s perspective, it is not more expensive to send or receive an instant credit transfer in euro than it is to send or receive a non-instant credit transfer in euro provided with the same additional features or services. In particular, PSPs offering different variants of a payment solution where the only distinguishing characteristic between them would be the use of instant credit transfers in one and non-instant in the other, should ensure that the total charge for the instant credit transfer in euro variant is not higher than the charge for the non-instant credit transfer in euro variant.

(19) In order to allow PSUs greater discretion when making use of instant credit transfers, a PSU should be able to set an individual limit fixing a maximum amount, either on a daily or per transaction basis, that it can send by means of instant credit transfer. PSUs should be able to modify or lift those individual limits at any time, without difficulty and with immediate effect.

(20) Security of credit transfers in euro, both instant and non-instant, is fundamental for increasing PSUs’ confidence in the payment service of sending and receiving credit transfers and ensuring its use. Under Directive (EU) 2015/2366, the only determinant of the correct execution of the transaction with respect to the payee is the unique identifier, as defined in that Directive, and PSPs are not required to verify the name of the payee. PSPs should have in place robust and up-to-date fraud detection and prevention measures, designed to prevent a credit transfer from being sent to an unintended payee as a result of fraud or error, given that it might not be possible for the payer to recover the funds before those funds are credited to the payee’s account. PSPs should have a certain degree of flexibility in designing the most suitable measures for dealing with different payment initiation options. Such measures should not result in PSUs incurring any additional charges or fees. PSPs should therefore provide a service ensuring verification of the payee to whom the payer intends to send a credit transfer (service ensuring verification). To avoid undue friction or delays in the processing of the transaction, the payer’s PSP should perform such service immediately after the payer provides the relevant information about the payee and before the payer is offered the possibility of authorising the credit transfer.

(21) Some attributes of the name of the payee to whose account the payer wishes to make a credit transfer, such as the presence of diacritics or different possible transliterations of names in different alphabets, differences between habitually used names and names indicated on formal documents, might result in a situation where the name of the payee provided by the payer and the name associated with the payment account identifier, specified in point (1)(a) of the Annex to Regulation (EU) No 260/2012 (payment account identifier), which was provided by the payer, do not match exactly but nevertheless almost match. In such cases, to avoid undue friction in the processing of credit transfers in euro and facilitate the payer’s decision whether to proceed with the intended transaction, the PSP should indicate to the payer the name of the payee associated with the payment account identifier provided by the payer in a manner which ensures compliance with Regulation (EU) 2016/679 of the European Parliament and of the Council (8).

(22) Authorising a credit transfer where the payee has not been verified can result in the funds being transferred to an unintended payee. PSPs should not be held liable for the execution of a transaction to an unintended payee on the basis of an incorrect unique identifier, as laid down in Article 88 of Directive (EU) 2015/2366, insofar as PSPs correctly perform the service ensuring verification. However, where PSPs, including payment initiation service providers, fail to correctly perform such service and where such failure results in a defectively executed payment transaction, such PSPs should refund the payer the transferred amount without delay and, where applicable, restore the debited payment account to the state in which it would have been had the payment transaction not taken place. PSPs should inform PSUs of the implications for PSP liability and PSU refund rights of the choice of the PSUs to ignore a notification provided in accordance with this amending Regulation.