Filenews 13 July 2025 - by Theano Thiopoulou
The revolution in instant payments is here to stay and inaugurates a new era in payments, with changes being continuous, as important developments change the landscape of daily transactions.
Lately, we have been observing a storm of projects and legislation, Marios Nicolaou, a senior official at the Association of Banks, related to electronic payments, told Fileleftheros, at the European level.
What is new in our daily lives, how much it will affect our lives and what are the timetables for their implementation, Mr. Nicolaou analyzes in Fileleftheros, having another capacity: an expert on payment issues and a member of the Board of Directors of the European Payments Council, representing the coalition of Greece, Cyprus, Ireland and Portugal.
According to Mr. Nicolaou, the main projects/legislation by the banks are:
– The Instant Payments Regulation (IPR), adopted by EU Member States on 9 April 2024. Its aim is to institutionalize an initiative introduced by the European Payments Council, also known as SEPA Instant Credit Transfers (ICT) direct payments.
Some provisions of the regulation, such as the obligation to receive direct payments from banks, have already been implemented since 9 January 2025, while some other provisions (such as the obligation to send ICT), are expected to be implemented by 9 October 2025.
According to the Regulation, all ICT direct payments (within and outside Cyprus) will have to be processed and transferred from the payer's account to the beneficiary's account within 10 seconds, at any time, and from any bank within the SEPA zone.
The regulation does not provide for a cap on instant payments and leaves it to transaction processors (including banks) to set their own limits per transaction.
The SEPA area includes the 28 EU Member States, as well as 10 other states inside and outside the EU, including Switzerland and the United Kingdom. The IPR Regulation is part of the EU's broader efforts to create a single, more integrated and efficient payment system across Europe, which is seen as a key tool for economic growth and boosting cross-border transactions.
The Regulation sets out rules, requirements and procedures for the adoption of direct payments in an effective way for the benefit of all parties involved, i.e. banks, businesses, consumers and the government.
Revolut payments
ICT instant payments are considered an important technological innovation in the world of payments, as they offer banks opportunities to develop new products and services. An example is the optional use of mobile payment applications, where the Beneficiary's phone number will be used on an electronic platform as an alternative to the IBAN for the processing of a payment. This method allows bank customers to make easier and faster payments without having to locate and register the beneficiary's long, IBAN.
At this stage, the members of the Association are examining the parameters for the creation of a domestic electronic platform (Revolut type) for processing payments through the mobile phone number.
It is noted that this product is offered as an additional service to the customers of the banks, since its creation is not mandatory by the Regulation. It is expected to be offered on the market around the end of 2025 or early 2026. Another important provision of the IPR is the "Verification of Payee" (VOP), which according to a regulation, is expected to be implemented by banks by October 9, 2025.
The VOP requires banks to confirm that the beneficiary's name matches the account details before their customers execute a transaction. This extra security measure helps prevent fraud and mistakes by immediately informing users of any discrepancies before completing the payment.
In June 2023, the European Commission presented two important legislative proposals concerning: the Third Payment Services Directive (PSD3) and (2) the Payment Services Regulation (PSR). These initiatives aim to improve the European payments market, building on the foundations of the PSD2 Directive, with a view to harmonising and reducing national differences in electronic payments.
What they serve
What are the objectives of the PSD3 Directive and the PSR Regulation, explains Mr. Nicolaou.
Fighting payment fraud: Implementing measures to detect and deter suspicious activities.
Strengthening consumer rights: Providing greater transparency and control in transactions.
Enhancing competition: Same rules for Payment Institutions and E-money institutions (PIs & EMIs)
Promoting Open Banking: Enhancing the sharing of customer data (such as their consumption habits) between banks and payment institutions, in a secure manner.
Ensuring cash availability: Guaranteeing access to cash through ATMs and other channels.
Harmonising the payments market: Reducing national disparities and creating a single market for payments within the EU.
The main differences between PSD3 and PSR are as follows:
PSD3 (Directive): It mainly deals with the licensing and operation of payment service providers. It must be incorporated into the national law of each Member State, with room for adaptation.
PSR (Regulation): It is directly applicable in all Member States with no room for adaptation. It includes rules on transparency, trading and risk management.
Implications for those involved
Consumers: Safer and more transparent payment services. Enhanced account access control and new customer authentication measures before payment is executed.
Banks and payment service providers: Requirements for technical support, strict compliance standards, and increased liability in cases of non-compliance.
The PSD3 and PSR bills are being worked on in the European Parliament and the Council. Their final form is expected at the end of 2025. Their implementation is foreseen in 2027, taking into account that there will be a transitional period of 18 months after their final approval.
