On Monday February 26, 2024, the European Union adopted a regulation which will require banks, from 2025, to offer instant transfers at the same price as standard transfers. A small revolution in finance which should boost the use of this still marginal service.
An instant transfer offer soon to be generalized
A small banking revolution is brewing in Europe. On Monday, Brussels adopted a regulation that will impose instant transfers on all banks in the euro zone by October 2025.
Concretely, they must make it possible to send or receive funds in less than 10 seconds, 24/7, at no additional cost.
Currently, the majority of French banking establishments charge €1 per instant transfer. Tomorrow, these additional fees will be banned, to the great dismay of banks who will have to review their pricing policy and their IT systems.
This compulsory free service is a small revolution. Certainly, some online banks like Boursorama have already taken the plunge. But in 2025, all French and European banking players will have to comply.
For individuals, a change in habits is also looming. Today, only 1 in 20 transfers are made instantly in France. Simplicity and cross-border interoperability could make uses take off
Technical challenges for banks
For French banks, this European regulation involves technical updates, in order to streamline and secure transactions. They will need to strengthen verification systems to quickly verify the identity of the beneficiary and avoid errors or fraud.
Another challenge: managing a sharp increase in instant transfer volumes, with systems capable of processing thousands of simultaneous transactions without latency. In this regard, 100% online banks, at the cutting edge of technology, seem better equipped.
On the financial side, compliance will entail significant costs, especially for small establishments which may have difficulty meeting the tight timetable set by Brussels.
The big winners obviously remain European individual and professional customers, who will benefit from ultra-fast cross-border money transfers at lower costs. A decisive step forward for the euro zone integration project.
With this ambitious regulation, the EU is betting on a spectacular takeoff of instant transfers, which are currently marginal. We will therefore have to wait until 2025 to judge whether its bet on free access and interoperability is bearing fruit.
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