The European Union has taken a significant step forward in modernizing and streamlining financial transactions across the continent with the recent adoption of a new law. This groundbreaking legislation is set to revolutionize the way bank customers in Europe handle money transfers.
Under this new system, individuals will have the ability to transfer money across Europe in an astoundingly quick timeframe - within just 10 seconds. This rapid transaction capability will be available at any time, day or night, breaking the constraints of traditional banking hours as we readi in AFP.
This facility is not just confined to domestic transactions within individual EU countries but is also applicable to cross-border transfers to any EU country, marking a significant enhancement in financial connectivity and convenience across the continent.
The legislative process culminated in the adoption of this law on a recent Monday, signaling a major shift in the European financial landscape. The law is anticipated to be formally enacted by April.
In the wake of this development, banks within the eurozone's single currency area are expected to integrate and facilitate instant payment services within a stipulated period of 18 months from the date of formal enactment.
The decision to implement this law received unanimous backing from all 27 member states of the EU, following preliminary approval from the European Parliament. This consensus reflects the widespread recognition of the need for financial reform and modernization within the Union.
One of the key components of this new regulation is its approach to the fees associated with these instant transactions. The European Council, representing the member states, has mandated that if banks opt to charge for these instant transfers, the fees must not be more exorbitant than those levied for standard credit transfers.
This mandate is a crucial step in ensuring that these rapid transactions remain accessible and affordable for all bank customers.
The timeline for adherence to this new regulation varies based on the geographical location of the banks. Banks outside the eurozone have been granted an extension until 2027 to comply with the new law.
Furthermore, for transactions originating from accounts in local currencies, the deadline extends even further, to 2028, offering additional time for these banks to align with the new system.
Before the introduction of this law, the landscape of money transfers in the EU was quite varied and often inefficient. In several EU countries, while the option for free transfers existed, these transactions typically required one to two days to process. Instant payment services, though available, were often more expensive and were not applicable for international transactions.
The introduction of this new law is a significant stride towards unifying and expediting the process of money transfers across Europe. It aims to enhance the efficiency, speed, and convenience of financial transactions for bank customers, marking a new era in European banking and finance.
26.02.2024
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