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The European Union recently announced it had adopted new rules to ensure that transferred funds arrive immediately into the bank accounts of retail customers and businesses.
The move finally brings the EU into line with the United Kingdom, where the Faster Payments Service (FPS) was successfully launched in May 2008.
This had a significant impact on the way numerous industries operated including the online gambling sector, which had previously suffered from slow payment processing.
Many betting sites offering fast withdrawal have been around for a while in the UK, thus ensuring that punters can access their winnings in a timely manner.
The new regulations for members of the European Union are designed to ensure that individuals and businesses are not forced to wait for digital payments.
Banks and other payment service providers (PSPs) must also make sure that credit transfers are processed immediately and are affordable.
The previous Single Euro Payments Area (SEPA) rules had been a source of frustration across the continent, as they allowed financial institutions to place obstacles in the way of speedy transfers.
However, the new system will ensure that instant credit transfers will be executed regardless of the hour or day. The money must arrive into the recipient’s account within ten seconds.
The person of organisation making the payment must also be informed whether the funds have reached their intended target within the same timeframe.
EU member states whose currency is not the Euro must also adhere to the rules, although the ten seconds timescale will not be applied outside of business hours.
PSPs must have stringent fraud detection and prevention measures in place to support the new system, and also provide a service to verify the recipient’s identity.
Other key elements in the new regulations include modifiable transfer limits, a compensation programme and measures to prevent money laundering and terrorist financing.
Michiel Hoogeveen (ECR, NL), the lead Member of the European Parliament said: “The Instant Payments Regulation marks the long-awaited modernisation of payments in the European single market.
“Customers can now say goodbye to the inconvenience of waiting two or three working days to access their money.
“We are delivering on something that people and businesses truly care about – transferring money within 10 seconds at any time of the day.”
The EU’s decision to adopt new instant payment rules will be a massive boost to consumers and businesses alike, with the previous set-up completely unfit for purpose.
Hidden international payment fees had become a major problem, rising from €22 billion in 2019 to a staggering €30bn last year.
A lack of transparency in the financial sector caused massive headaches across the EU, but the new regulations should serve to rectify matters.
The gambling sector in the EU should benefit massively from the new instant payment rules, allowing companies to compete more effectively with UK-based firms.
The UK’s Gross Gambling Yield (GGY) of £15.1 billion from April 2022 to March 2023 dwarfed every other EU nation, highlighting how it has benefited from the FSP scheme.
In simple terms, bettors do not want to wait for deposits and withdrawals to be processed, nor are they inclined to deal with firms who apply additional fees to payment transactions.
By removing those elements from the equation, the EU has handed its gambling operators a much greater chance of building their customer databases.
The EU’s introduction of a standardised electronic identification method is also a welcome move, further bringing the EU into line with the EU.
The European Gaming and Betting Association (EGBA) has given its backing to the European Digital Identity (e-ID) scheme, which will allow citizens to identify and authenticate themselves online without having to resort to third-party commercial providers.
This has previously raised privacy and security concerns among consumers, but the new system will provide them with much greater peace of mind.
Businesses will also benefit as their administrative costs will be reduced – a significant factor in the gambling industry where profit margins can be extremely tight.
The e-ID was first proposed by the European Commission in 2021, and is expected to be formally endorsed EU Council of Ministers before its official adoption this summer.
Maarten Haijer, Secretary General of the EGBA, says his organisation is delighted that the European gambling industry has been handed such a significant boost.
“We welcome the European Parliament’s approval of a unified digital identity framework and are confident that the use of the new e-ID in our sector will lead to a more seamless and trustworthy online experience for players and help to reduce costs and administration for gambling operators,” Haijer said.
“This innovative tool represents an important step towards building a more secure and user-friendly digital ecosystem, aligning with EGBA’s core objectives of promoting integrity, transparency and a safe, consumer-centric playing environment.
