EU adopts new rules for instant payments to empower fintechs
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The European Union Council recently adopted new rules involving instant payments that rely on the euro. The move will empower the local fintech firms, and challenge the dominance of US payments giants Visa and Mastercard, thus ensuring the creation of a more competitive market.
⏰ Money transfers in the EU will become faster and easier!
💶 New rules on #InstantPayments will increase the number of payment options available to consumers.
More: https://t.co/UnvUjGNJwT
— EU Council (@EUCouncil) February 26, 2024
Benefits of the new regulations
Recent reports say that the new additions to the regulations will have a positive effect on the payment landscape. The idea is to enhance it by allowing fintech firms’ customers to transfer euro-denominated money within only 10 seconds across all EU member states. The speed of the transactions will remain the same even outside of business hours.
In doing so, the EU will boost cross-border payments, and allow European payment companies to challenge established payment giants who dominated the market up to this point. Regulatory changes also mark a departure from the existing payment system, which required transactions made via traditional cards and deposits to take several days before being processed.
More than that, the move will enhance the strategic autonomy of the EU’s economic and financial sector. In other words, the European Union will no longer have to rely on the financial institutions and infrastructures of other countries. Instead, it will strengthen its own position in the global payments market.
Enhancing the European payments landscape
In addition to all of the listed benefits, the EU’s move also reflects efforts to promote fair competition among payment service providers and level the playing field which has been dominated by Visa and Mastercard for decades.
At the same time, the adoption of instant EUR payment rules will also promote the growth of the EU’s own fintech firms. Many of these companies have already seen success in the financial industry when they challenged traditional banking models.
The EU regulators believe that fintech firms will now offer consumers and businesses a much more convenient alternative to traditional banking services. The new payment option will be more faster and efficient, and will likely be preferred simply because they are tailored to satisfy the users’ needs.
Instant payments are starting to gain traction, and both businesses and consumers have shown interest in exploring new opportunities in terms of financial products and services. The interoperability of instant payment systems is also paving the way for a more developed cross-border commerce and advanced collaboration. All of this will only drive the economic growth and prosperity of EU members further.
The European Parliament recently also approved regulations that would enhance credit transfers across the EU, with consumer safety being the priority. Now, 10-second EUR transactions across the EU will open even more new opportunities.
