COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) No 260/2012 and (EU) No 2021/1230 as regards instant credit transfers in euro
Date: 2022-10-26
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: capital movement, electronic banking, electronic money, euro, financial legislation, financial services, innovation, intra-EU payment, payment system, provision of services

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 26.10.2022  SWD(2022) 547 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT  Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  amending Regulations (EU) No 260/2012 and (EU) No 2021/1230 as regards instant credit transfers in euro {COM(2022) 546 final} - {SEC(2022) 546 final} - {SWD(2022) 546 final}  
 
 
Executive Summary Sheet 

Impact assessment on the Commission proposal for a Regulation on instant credit transfers in euro 

A. Need for action 

What is the problem and why is it a problem at EU level?  

The problem is the insufficient uptake of euro instant payments (IPs), i.e. credit transfers which provide funds 
to the payee within maximum ten seconds of the order from the payer. Despite the existence of a common set 
of rules (a scheme) and infrastructure for IPs in euro since 2017, these are only offered by about two thirds of 
EU  Payment  Service  Providers  (PSPs)  and  only  constitute  about  11%  of  all  euro  credit  transfers  in  the  EU. 
This low uptake is problematic because it leads to unrealised efficiency gains and limited choice of means of 
payment at Point of Interaction (PoI) with merchants. The problem drivers are insufficient incentives for PSPs 
to provide euro IPs and related network externalities; dissuasive transaction fees of IPs for payers; a high rate 
of rejected IPs due to false hits in sanctions screening; and payer fears regarding the risk of fraudulently and 
erroneously misdirected IPs. 

What should be achieved? 

The objective is to significantly increase the uptake of IPs, so that the majority of euro credit transfers will be 
instant. This will be achieved by making IPs in euro available by all relevant PSPs in the Euro area, removing 
price deterrents to the use of IPs, eliminating failure of IPs due to false positive hits in sanctions screening, and 
assuaging  consumer  fears  about  fraud  and  mistakes  in  IPs  by  providing  a  means  of  reducing  them.  The 
initiative is expected to improve the efficiency of the retail payments market and unlock the benefits of instant 
payments for EU citizens and businesses. It should also facilitate cross-border trade within the EU and enhance 
the integration of the Single Market, supporting the recovery of the European economy. 

What is the value added of action at the EU level (subsidiarity)?  

Given the network effects, the unavailability of euro IPs from many relevant PSPs hinders the effective uptake 
of cross-border euro IPs. The underdevelopment of IPs in several Member States cannot be solved at national 
level.  The  initiative  will  enhance  the  existing  Single  Euro  Payments  Area  (SEPA)  and  take  the  form  of  an 
amendment of the SEPA Regulation. 

B. Solutions 

What are the various options to achieve the objectives? Is there a preferred option or not? If not, why? 

The preferred option is a combination of an obligation on all relevant PSPs to offer IPs in euro, a requirement 
of at least equal pricing of IPs and regular credit transfers, harmonising the rules on sanctions screening of IPs 
based  on  frequent  (minimum  daily)  updating  of  client  lists  with  sanctions  lists  (without  lowering  the 
effectiveness  of  sanctions  screening),  and  an  obligation  on  PSPs  to  offer  a  service  verifying  concordance 
between  IBAN  and  name  of  payee,  in  order  to  reduce  errors  and  fraud  in  IPs.  Rejected  options  include  the 
baseline, and more interventionist options such as phasing out non-instant credit transfers and requiring IPs to 
be offered free of charge. 

What are different stakeholders' views? Who supports which option?  

Consumer organisations are strongly in favour of an initiative on IPs,  obliging PSPs to offer IPs at the same 
price  as  regular  credit  transfers  and  with  a  preference  for  more  far-reaching  options  than  those  selected  in 
terms of consumer protection (including a refund rights for IPs). The merchant and business sectors, including 
SMEs, are very supportive of IPs, which they consider can provide more choice and thus drive down the cost 
of  making  and  accepting  payments,  in  particular  at  PoI.  The  approach  of  PSPs  depends  on  their  current 
situation  and  in  particular  whether  they  already  offer  euro  IPs  and  at  what  price  to  the  payers:  those  which 
already  offer  euro  IPs  without  premium  pricing  are  supportive,  while  those  which  do  not,  or  do  only  for  a 
premium price, tend to prefer a voluntarist approach. All PSPs are very supportive of having harmonized rules 

 
 
on sanctions screening. Member States are broadly supportive. 

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise of main ones)?                                     

A wide range of benefits from improved liquidity and cash-flow will accrue to all recipients of credit transfers, 
including  consumers,  merchants,  businesses  and  public  administrations  including  tax  authorities.  This  will 
significantly boost economic efficiency at both macro and micro level. Currently, billions of euro are in transit 
in payment systems at any given time and not available for consumption or investment. Greater use of IPs will 
also  stimulate  the  development  of  new  payment  solutions  to  permit  their  use  for  purchase  of  goods  and 
services  at  PoI,  in  particular  cross-border,  increasing  choice  of  payment  methods  and  producing  cost 
reductions  for  merchants  which  can  potentially  be  passed  onto  consumers.  The  new  approach  to  sanctions 
screening will involve major cost savings for PSPs, largely offsetting the costs to PSPs of other components of 
the package. 

What are the costs of the preferred option (if any, otherwise of main ones)?                                    

There will be  material,  yet proportionate,  one-off implementation  costs  for most PSPs  for offering  a service 
verifying the match between IBAN and name of the payee, and for those PSPs which do not already do so, for 
offering IPs. Ongoing costs for PSPs should be limited. Overall, cost impact for PSPs should be neutral over 
time, in light of savings for sanctions screening, reduced efforts related to the follow-up of fraud and errors, 
reduced costs related to handling cash and cheques, and the possibility to more effectively compete with the 
incumbents and offer innovative PoI solutions based on IPs, including for cross-border payments. 

What are the impacts on SMEs and competitiveness?  

SMEs which are PSPs incur lower costs in order to offer IPs than larger PSPs. SMEs which are business users 
of  payments  (corporates),  should  benefit  from  better  cash  flow,  without  incurring  any  significant  adaptation 
costs.  SMEs  which  are  merchants  will  share  the  potential  benefits  of  greater  competition  at  PoI.  IPs  should 
make the EU economy broadly more competitive internationally. Greater  choice of means of payment at PoI 
should reduce the EU's dependency on International Card Schemes and BigTechs in this area. 

Will there be significant impacts on national budgets and administrations?  

There will be no significant costs for national budgets  and administrations. Public administrations will share 
the benefits, as users of payment systems, in terms of faster receipt of revenues including tax collection and 
reduction in tax evasion. 

Will there be other significant impacts?  

The envisaged service verifying the match between name and IBAN of the payee is expected to contribute to a 
reduction in fraud levels associated with IPs and may also be offered by PSPs for other types of credit transfer. 

How is proportionality achieved?  

Proportionality  is  achieved  first  by  excluding  from  the  obligation  to  offer  IPs  those  PSPs  which  are  not 
relevant,  either those which do not offer payment services to clients or which do not necessarily  have  direct 
access to payment systems and for whom offering IPs can be more difficult or expensive. Secondly, there are 
differentiated sequenced deadlines for the services of receiving and sending IPs and for PSPs in the Euro area 
and outside the Euro area.  

D. Follow up 

When will the policy be reviewed?  
The uptake of IPs and the application of the different requirements by PSPs will be evaluated at an appropriate 
time  following  the  occurrence  of  the  various  application  deadlines,  in  accordance  with  the  European 
Commission best practice on evaluation.