EU Parliament: Banks must offer real-time transfers

Ten seconds – that’s how long it should take in the future until the money ends up in the recipient’s account during a transfer. Without further costs. The EU Parliament has paved the way for this. But there are also safety concerns.

The EU MP Markus Ferber from Bavaria describes a situation that many people are familiar with: “You make a transfer and the money is immediately debited from your account, but it sometimes takes two days for it to reach the recipient – and sometimes a weekend in between lies, even longer.”

Not anymore. The EU Parliament decided today that in future transfers in Europe should no longer take days, weeks or hours, but only ten seconds. All European banks will have to offer this real-time transfer to their customers in the future, with a certain transition period. Extra fees may no longer be charged for this.

“A Leap from Stagecoach to Email”

For the rapporteur of the law, the Dutchman Michiel Hoogeven, this is also a great advantage for companies: “They can offer the transfer not only within the same country, but in all EU countries.” The measure will, in fact, enormously speed up today’s banking system, or as Parliamentarian Ferber says: “It’s a leap from stagecoach to email.”

In the future, you can buy a pair of shoes or a table from your neighbor and type the transfer directly into your cell phone. The seller then has the money in his account a smile later. Credit cards or other payment systems such as Paypal, which mostly come from America, are actually no longer necessary. That’s also one reason why the EU introduced this law: European banks are making themselves more independent of American payment systems.

Why, one wonders, did it take so long for the money to flow from the “Anna” account to the “Bernd” account? Thomas Rienecker from the Savings Banks and Giro Association explains what happened during this time: “It’s a question of quantity. In Germany, eight billion transfers are made every year, which are then processed.” This processing takes a day. Meanwhile, security checks are also carried out, for example for money laundering or other fraud, says Rienecker.

Not all MPs are enthusiastic

So it’s also about security and that’s why not all MEPs are enthusiastic about this speed payment system. “The most important thing is that the remittances have to be secure. The EU Commission still needs to tighten this up,” says Martin Schirdewan from the Left Party.

Security has always been an issue, but banks now have to carry out this check in just a few seconds. Whether the IBAN or the name is correct can be checked in the blink of an eye. Likewise, whether the transfer is going to someone who is on a sanctions list. AI will probably help with that.

And yet the human factor remains: If you make a mistake and “Bernd” accidentally transfers 500 euros instead of 50 euros, he will have the money legally secure in his account in just a few seconds.