Filenews 27 December 2024
Significant banking revolutions in the field of transactions for thousands of bank customers are in store in 2025, with the main goal of fast payments at a cheaper cost, an issue that has been a field of political controversy in the recent past.
The change, which will take effect in January 2025, which also means lower charges for bank customers, changes the regime for instant payments on two levels: that of charges and that of mandatory availability of instant payments. The European Parliament's objective through the revised regulation is to create favourable conditions for increased competition in payments, integrate innovation and market developments in the payments sector, promote the development of new payment products at Union level and facilitate market access for new entrants. The different pricing is permanently abolished and the cost of cross-border transfers is put on an equal footing with the cost of domestic transfers. As of January 2025, Cypriot banks, like any bank in the Eurozone, are obliged to accept instant payments.
Money transfer without IBAN
The second major change, which was significantly delayed in implementation by banking institutions and would have significantly reduced costs for customers, is in the initial stage of elaboration and is expected to become operational in the second half of 2025. It is the application that will allow users to instantly transfer money from one bank to another in Cyprus, through their mobile phone (ebanking), completely free of charge. Users of the service will be able to make their money transfers, directly and easily to friends, using their mobile number, without knowing the IBAN, as long as they have activated the application on their mobile. The money transfer process will be completed within a few seconds and the payee will be immediately informed about the completion of the transaction.
A similar function for money transfers only through a telephone number has been provided by banks in Cyprus so far, such as Bank of Cyprus with QuickPay and Hellenic Bank with ContactPay. The difference, however, is that money transfers to these banks via phone number are only done directly if the payer and receiver are customers at the same bank. Banks are working towards enabling customers of all banks to transfer money to IRIS standards in Greece. In Greece, activation of the IRIS system is very easy and is done through the application of the bank in which the user has an account, without having to go to a branch and the daily transaction limit is €500. Let us clarify that the IRIS system used in Greece and not yet in Cyprus will not replace the regulation of 9 January but will be an additional option to transfer money not through an IBAN and account number, but simply through a telephone number.
Reductions in interest rates and commissions
The third important thing is that at the beginning of the new year, banks are expected to promote loan products and facilities to stimulate the interest of potential borrowers who are cautious to take the next step. Measures have already been announced by Bank of Cyprus and Hellenic focusing on housing loans for young couples, lower commissions for specific transactions, facilities for customers of specific age and vulnerable groups and the installation of new ATMs.
Bank of Cyprus measures include interest rate reductions, rewards for consistent borrowers, new housing and business loans on favourable terms, as well as facilities for customers 18 and over and 65 and over. They will apply from 10/01/2025. Also, in cooperation with the government and JCC, a number of ATMs will be installed in selected rural areas (within the 1st quarter). Hellenic Bank's measures include the installation of ATMs (implementation time will be needed), removal of specific charges to pensioners, free bills for young people, new housing products and interest rate reductions. The measures will be phased in with full implementation by 31 January 2025.
