By Chrysostomos Tsoufis

No more waiting 2 and 3 days, even longer in exceptional cases, for an individual or a business to see their money credited to their account. Now banking transactions should be done in 10 seconds!!!

That decided it European Parliament yesterday with an overwhelming majority of 599 in favor, 35 against and 7 abstentions revolutionizing the community’s financial development.

The direct credit law provides that direct transfers of amounts in euros will be carried out immediately (regardless of the day or time the order is given) and the money should reach the recipient’s account within ten seconds.

At the same time the banks should inform as well in 10 seconds the payer that the money he gave has been transferred and is now available to the beneficiary. The law applies to both individuals and businesses and aims to ensure that private bank customers and businesses, especially small and medium-sized businesses, do not have to wait for their money to enter their account.

The second important element of the European Parliament’s decision is that the direct credits will be carried out without any additional costs for the customers of the banks. The charge for a direct credit (currently provided as a premium service to “selected” customers) may not be higher than the charge for a corresponding non-direct credit.

In addition there is no limit to the number of direct credits that one can request from a certified payment platform.

At the same time, the law obliges payment service providers to upgrade and update prevention and detection measures to avoid errors in the transfer of amounts.

To this end, providers operating in the EU should immediately, without additional charges or fees, provide services to verify the identity of the beneficiary.

As an additional safeguard, providers should allow their customers to set the maximum amount they want for direct euro transfers, which can be easily changed before the next transaction.

If a provider fails to fulfill its fraud prevention duties resulting in financial loss, the customer will be able to seek compensation under the new rules.

The providers that offer instant money transfers they should also verify whether any customer is subject to sanctions or other restrictive measures related to money laundering and terrorist financing.

The new rules will enter into force 20 days after they are published in the Official Journal of the EU. Member States will have 12 months to implement the regulation. The rules should also be applied by states that have not joined the Eurozone for accounts that already offer regular changes in euros, but they will have a longer transition period at their disposal. It is expected that there will be a special derogation from making payments within ten seconds for such accounts when the order is given outside business hours, given potential concerns about access to foreign exchange liquidity.