Cyprus entering the era of instant payments - Interbank and interstate transactions in 10 seconds

From 9 January, 2025, bank customers will be able to receive direct payments from any bank in Cyprus or the SEPA zone, in much less time than regular bank transfers.

More specifically, the time it takes to complete a payment from the payer's account to the beneficiary's account will be limited to just 10 seconds (regardless of the country from which the payment is sent), while the corresponding time today is one to two days.

Direct payments will be implemented in all countries in the SEPA zone, which include the 27 EU member states, plus nine other countries inside and outside the EU, including the United Kingdom.

The above date derives from the relevant "European Regulation on Direct Payments" ("the Regulation"), which has already entered into force, with two main implementation schedules for banks: 9 January, 2025, and 9 October, 2025.

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 "Verification of Payee," with an implementation schedule of 9 October, 2025, states that: before pressing the button to complete an instant payment, the Payer will have the legal right to know that the account number (or IBAN) he filled in corresponds to the correct name of the Beneficiary who he wishes to send the money to, both within and outside Cyprus.

In this way, errors or fraud attempts will be avoided. It is noted that the limit for money transfers through direct payments is set by each bank individually, as it is not provided for by the Regulation.

Current transaction costs to remain

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 (transfers).

Additional options for greater convenience

Additionally, the Regulation enables banks to offer some additional services to their customers for their better service, without however making them mandatory.

One of these is the voluntary creation of a common platform (mobile app type), where the customer will have the ability 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 phase for the creation of this platform in Cyprus, which, if all goes well, is expected to be operational in mid-2025.

Faster with maximum security

In conclusion, 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 regular bank transfers.

(Source: InBusinessNews)