The EU sets the limit for bank transfer time to 10 seconds
europarl.europa.eu
europarl.europa.eu
does this mean instant SEPA transfers must now be free ? Because currently my french bank charges 1€ or something for instant SEPA transfers but doesn't charge anything for non-instant SEPA transfers.
It seems that is the point. With my current bank it‘s free, but I need to enable it for every transaction. Annoying.
They're just trying to milk every possible avenue while they can. Poor banks. /s
- Guaranteed by the European central bank, that is advancing the money for free
- Done instantaneously, by the ECB
- Cost around 0.01 euro per transfer
So the entire delay between sending and receiving the money, that banks pretend is used to guarantee that the transfer is legitimate, and that the money exists etc, etc is actually purely artificial. The ECB is shouldering the risk, and advancing the money, free of cost.
All the rest (extra charges, delays, etc.) are banks handsomely lining their pockets.
No. It just means that your transactions will fail because of poor internet. /s
I’m really glad to see Europe making laws that improve citizens quality and competitiveness for companies.
How is this anything but a win for consumers?
We know that sub-10-second-transfers are possible, by making it the norm you are not decreasing competition, just forcing players who are not competitive in this regard to conform or exit the field.
Markets are not perfectly efficient and you can have competitors surviving due to foul play or simply customer inertia. This protects consumer interest by forcing such market players to at least get to a baseline level or die.
In any case, transfers rely on both banks processing the transaction speedily, so it wouldn't seem like something one bank could do unilaterally.
Imagine being able to pay that quickly to your economically challenged neighbor (Argentina)?
"Euro Transfer" as in SEPA means that the currency of the transfer is set to EUR and that currency exchange is not part of the transfer itself (it can be done at originating or retrieving bank when the account involved is not in EUR, but the transfer itself has to be denominated in EUR at entry and exit from SEPA system)
"There are 36 countries in the SEPA area." https://www.revenue.ie/en/starting-a-business/documents/guid...
https://g1.globo.com/economia/noticia/2023/07/16/pix-tipo-ex...
But there have been some noises in the direction of expanding regular service through Latin America. India's UPI also seems to be internationalizing. And there's FedNow in the US that is probably going to get automatically popular just for being from the US. Wonder if we're going to end up with a bunch of incompatible systems around the world or what.
So if that contributed to it, it'd actually be something good that came out of crypto.
The large British banks introduced their equivalent (being outside the Euro) in 2009-2010. I expect other European countries had national systems at around that time too.
But SEPA system was something that was "in the works" for I think a decade by then. A lot of it was essentially setting up faster interconnection that was compatible and cooperated with existing SWIFT systems and essentially enforced one standard set of parameters.
> FedNow is an instant payment service developed by the Federal Reserve for depository institutions in the United States, which allows individuals and businesses to send and receive money.[1][2][3][4]
* https://en.wikipedia.org/wiki/FedNow
> The FedNow Service went live on July 20, 2023. It is available to depository institutions in the United States and enables individuals and businesses to send instant payments through their depository institution accounts. […] At the most fundamental level, the service provides interbank clearing and settlement that enables funds to be transferred from the account of a sender to the account of a receiver in near real-time and at any time […]
* https://www.federalreserve.gov/paymentsystems/fednow_about.h...
> The Federal Reserve said on Monday that it would create a real-time payments system, with the goal of making paychecks and money transfers available for use more quickly.
* https://www.nytimes.com/2019/08/05/business/economy/fed-real...
(Your back-end has to be fast before your front-end can be.)
Banks are incentivized to make money available basically immediately because there is very little risk to them if it turns out to be fraudulent. And they're the only ones that can fix the infrastructure to clean this up. You move the liability from the blue collar worker cashing a check for $50 to the multi-national billion dollar corporation and it gets fixed pretty quickly.
Are you requiring people to check their statements every week to find fraudulent transfers? Are people who go on vacation screwed? How do you handle instantaneous transfers when the funds are available in seconds?
For example, someone asks to use your phone and you foolishly give it to them. They make a bank transfer when you aren't looking. With instantaneous transfer, you are screwed caused the funds are already available and fraud report isn't allow.
It might be possible to make the banks responsible for fraudulent transactions since they are ones that can do the verification.
Your example doesn't really work because for this to happen not only would I need to give this person my phone, I'd need to give it to them with my banking app open and the screen unlocked. At that point it's not a fraudulent transaction.
Right, but if I find it 60 days later when I balance my registry, then the CC company refunds me the money.
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Also, the banks really would rather not be loaning their customers money interest-free (which is what happens when they make funds available prior to fraud checks finishing). I think you have the incentives completely wrong.
There is no technological roadblock from verifying within seconds that a) a bank account exists with the given account and routing number; b) it is associated with the name on the check being deposited; c) it has available funds to cover the balance of the check. As it stands the banks give you the money as soon as its deposited (or very shortly thereafter), but that's no risk to them. They can come back and get it whenever should they need to.
If you didn't allow them to do that, we'd have the infrastructure for instantaneous fraud checks/balance verification nearly overnight.
The risk is insufficient funds in the account to cover the deficit
> There is no technological roadblock from verifying within seconds that a) a bank account exists with the given account and routing number; b) it is associated with the name on the check being deposited; c) it has available funds to cover the balance of the check. As it stands the banks give you the money as soon as its deposited (or very shortly thereafter), but that's no risk to them. They can come back and get it whenever should they need to.
You missed "d) was printed by a forger with otherwise valid information"
Seeing this made me kind of happy. At least there are still some topics where most politicians can still agree on something.
Not cross-currency, I don't think? SEPA is for euro only; while there are a few non-euro-using countries in SEPA, it's applicable only to euro transfers for those countries.
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An instant credit transfer is supposed to be executed regardless of the day or hour and the money must arrive into the recipient’s account within ten seconds.
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(India is now there with UPI, and I hear Brazil is doing great too. The USA has started the process, although it’ll take some time.)
Only 35 later than Japan's ZENGIN, which launched in 1973.
But it's actually allowed to stall for up to 2 hours if either bank wants to perform additional verification (which it sometimes has to based on who you are, who they are, etc).
So yeah, normally great but not quite Great Enough™ that you can build a payment processing system on top of it. Go Cardless tried with DD and now they're hooking directly into each banks's transfer flow.
Then:
PSD2 https://en.wikipedia.org/wiki/Payment_Services_Directive
SCA https://en.wikipedia.org/wiki/Strong_customer_authentication