From 9 October, bank customers will be able to pay and receive direct payments from any bank in Cyprus or the SEPA zone in much less time than regular bank payments and transfers.
More specifically, the processing time for a payment, from the payer's account to the beneficiary's account, is limited to just 10 seconds (regardless of the country from which the payment is sent), while the corresponding time today could be one to two business days, according to an announcement from the Association of Cyprus Banks.
Direct payments will be implemented in all countries in the SEPA zone, which are the 27 EU member states, plus 10 other countries outside the EU, including the UK and Switzerland.
The implementation date results from the relevant "European Regulation on Direct Payments", which has already entered into force, with two main implementation timelines for banks: 9 January, 2025, and 9 October, 2025 (for accepting and sending direct payments, respectively).
Based on the Regulation, banks must upgrade their electronic systems with more security controls, which will aim to avoid errors, prevent fraud, and even identify "suspicious transactions."
For example, the provision for the 'Verification of Payee', with an implementation schedule in October 2025, states that: before pressing the button to complete an immediate payment, the Payer will be able to know that the account number (or IBAN) he filled in corresponds to the correct name of the Beneficiary who wishes to send the money, both within and outside Cyprus. In this way, errors or fraud attempts will be avoided.
It is noted that the limit for transferring money through direct payments is set by each bank individually, as it is not provided for by the Regulation.
At least the current transaction costs
Another provision of the Regulation (with an implementation schedule of 9 January, 2025), requires banks not to charge higher fees to their customers for executing direct payments, compared to ordinary, existing payments and transfers.
Additional options for greater convenience
In addition, the Regulation enables banks to offer some additional services to their customers for their better service, without, however, it being mandatory. One of these is the voluntary creation of a common platform (like a mobile app), where the customer will have the opportunity to send money to any bank in Cyprus, with immediate processing, using the Beneficiary's phone number (or even email address), instead of his IBAN. At this stage, the banks are in the study stage for the creation of this platform in Cyprus, which, if all goes well, is expected to be operational within 2026.
Faster with maximum security
Finally, it is noted that the Regulation aims at faster and more secure payments, for citizens and businesses, from all countries in the SEPA area, and with charges that will not exceed those currently in place for ordinary bank payments.
(Source: InBusinessNews)
