The European Union Council has adopted new rules for instant payments using the euro to empower fintech companies in Europe and challenge the dominance of US giants Visa and Mastercard.

According to a report by Reuters, these regulations aim to enhance the payment landscape by allowing customers to transfer euro-denominated money within 10 seconds, even outside traditional business hours, across EU member states.

Targeting Cross-Border Transactions

By enabling instant euro payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, the EU aims to boost cross-border payments and bolster the competitiveness of European payment companies against established firms. The new regulation marks a significant departure from the existing payment system where transactions using traditional cards and deposits often take several business days.

One aspect of this initiative by the EU is to enhance the strategic autonomy of the European economic and financial sector. By reducing reliance on third-country financial institutions and infrastructures, the EU seeks to strengthen its position in the global payments market.

⏰ Money transfers in the EU will become faster and easier!

💶 New rules on #InstantPayments will increase the number of payment options available to consumers.

More: https://t.co/UnvUjGNJwT

— EU Council (@EUCouncil) February 26, 2024

Besides that, the move reflects efforts to level the playing field and promote fair competition among payment service providers, including fintech firms that leverage customer data to offer services. The adoption of instant euro payment rules is expected to promote the growth of European fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term companies, which have been increasingly challenging traditional banking models. According to the regulator, fintech firms can offer consumers and businesses convenient alternatives to traditional banking services with faster and more efficient payment mechanisms.

Empowering European Fintech Firms

As instant payments gain traction, businesses and consumers are exploring new opportunities for financial products and services tailored to their needs. Moreover, the interoperability of instant payment systems across EU member states will pave the way for cross-border commerce and collaboration, driving economic growth and prosperity.

Recently, the European Parliament approved regulations aimed at enhancing credit transfers across the EU. Finance Magnates reported that these rules promise to enhance security and efficiency for consumers and businesses.

The new regulations prioritize consumer safety by mandating financial institutions and payment service providers to bolster fraud detection and prevention measures. Instant credit transfers, requiring funds to reach recipients within ten seconds, mark a significant leap in transactional efficiency.

Payment service providers must inform payers about the availability of funds in real-time, empowering consumers with immediate knowledge and control over their transactions. To combat fraudulent activities, payment service providers must offer prompt identity verification services without additional charges.