Transfer in real time is coming: EU makes electronic payments uniform

With the corona crisis, payment solutions such as EC cards or mobile phone apps are experiencing an enormous upswing. Electronic payment is now to become even more uniform in the EU. Soon it should be possible to make a transfer anywhere within seconds.

Electronic payment should become more uniform, faster and safer in the European Union. By the end of 2021, real-time transfers should be the norm across the EU. This is the goal of a new strategy for retail payments that the EU Commission intends to adopt next Wednesday.

The background to this is the rapid development of various electronic payment solutions, from debit or credit cards to mobile phone apps and smartwatches, which have been boosted again with the corona crisis. The EU Commission complains that the European market is still fragmented. With the exception of credit cards from global providers and solutions from large technology groups, there is no digital payment solution that can be used in shops and online across Europe. The aim is to have competitive, own pan-European solutions.

A central point for the Commission is the availability of so-called real-time transfers – in English "Instant Payments" – with which money is posted directly to the recipient's account in a matter of seconds. "The Commission aims for full implementation of Instant Payments in the EU by the end of 2021," says the strategy paper. Uniform rules, uniform technical standards and the corresponding infrastructure are necessary for this.

Cash stays

In order to convince consumers to use it, the Commission is calling for rules that are similar to those for other payment methods such as card payments. Specifically, it is about the possibility of reimbursement, because up to now an instant transfer – unlike a conventional bank transfer – could not be stopped in the event of an error. The Commission admits that this could result in costs and wants to cap consumer fees if necessary.

The CSU MEP Markus Ferber welcomed the plans. "The strategy for payment transactions starts in the right places: security, reliability and speed must be in the foreground in all initiatives," said Ferber. Costs should not be forgotten. "If the projects from the digital payments strategy are implemented quickly, there will no longer be a need for virtual currencies in the EU," he added. With all the digitization of payment transactions, cash should not be allowed to get under the wheels.

Indeed, the Commission is clearly committed to the future of cash. It is to be retained in the long term, as is the obligation for traders to accept notes and coins at their full face value. According to the strategy paper, 78 percent of all transactions in the euro zone are still processed in cash. Alongside Austria, Slovakia and Slovenia, Germany is one of the countries that are still particularly fond of cash – unlike Estonia or the Netherlands, for example.