The European Central Bank (ECB) has issued a warning to banks that charges levied for instant payments are proving a barrier to uptake.
Speaking at a payments forum led by the central bank of Finland, ECB board member Fabio Panetta was detailing steps the system had taken to ensure pan-European reach of instant payments by the end of this year through the Target instant payments settlement service (TIPS).
However, Panetta remarked that compared, the private sector has made ‘far less progress’ on this issue. He said the next step for payment service providers must be to offer instant payments at ‘attractive and transparent conditions’.
The ECB board member defined these conditions as prices that should be neither excessive nor hidden to consumers, after he pointed the cost for service providers of using the Target Instant Payment Settlement service is €0.002 per instant payment transaction. Transactions cost scan sometimes climb as high as €1 for instant payments.
Panetta said, “For instant payments to become the new normal, they must be cheap and easy to use. We would also like to see providers make instant payments available on all commonly used electronic channels and offer much-desired functionalities such as Request-to-Pay.”
He cited the work done by the European Payments Initiative, which is a collection of banks currently working to create a pan-European payment solution for the point of interaction. Panetta remarked Europe in the past had become overly dependent on a few foreign providers for card and online payments due to the continent’s ‘wait-and-see’ attitude towards the online payments market.
Panetta concluded, “To promote innovation and digitalisation, we are also investigating the opportunities of pan-European electronic identities and electronic signatures for retail payments. Finally, the strategy encompasses work on the environmental sustainability of payments and on access to payments for all citizens.”
The ECB recently conducted a consultation on the potential for a future digital euro. The consultation – which received over 8,000 responses – found privacy would be most valued in the creation of a digital euro currency.
Copyright © 2021 RegTech Analyst
Copyright © 2018 RegTech Analyst
