"Instant payments regulation: an evolution, not a revolution, of the Spanish payments market"

So while the regulation requires that customers must always be able to request that a euro transfer within the EU be made within a maximum of 10 seconds, it does not mandate that all payments must be made instantaneously. It is therefore to be expected that in the coming years payments of pensions, subsidies and payrolls, among others, will continue to be made mostly in advance of their settlement date.

In addition, the regulation states that a customer may not be charged a fee for initiating an immediate payment that is higher than the fee charged for executing a "traditional transfer." This does not necessarily imply that transfer services will be free of charge. The precise fee will continue to depend on the business strategy of each payment service provider. However, since the higher cost of processing an instant payment compared to a traditional one cannot be passed on in the final price of a transfer, the authorities expect a gradual reduction in the price of this type of service.

This does not necessarily imply that transfer services will be free of charge.

On the other hand, despite the fact that the explanatory memorandum of the regulation states that "ubiquitous instant credit transfers in euro offer opportunities for PSPs to develop new payment solutions," the obligations of the regulation affect the underlying payment service, instant payment, on which solutions such as Bizum are built, rather than Bizum or similar solutions per se.

Taking all of the above into account, one might wonder what the real impact of the new regulation will be on the supply of payment services and solutions.

The quick answer in Spain is that it will not represent a significant change in the current market dynamics, as the main providers here already offer their customers both instant payment services and a similar payment solution based on this type of service, Bizum. This solution is also widely accepted by users, to the point that its widespread use is one of the reasons why Spain is one of the leaders in the adoption of instant transfers in the eurozone.

However, this does not mean that this regulation will not have a material impact in the economic, business and technical fields.

The quick answer in Spain is that it will not represent a significant change in the current market dynamics, as the main providers here already offer their customers both instant payment services and a similar payment solution based on this type of service, Bizum

First, payment service providers will have to rethink their transfer marketing strategy. Secondly, they will have to modify their interfaces and payment initiation channels to ensure a level playing field between instant and non-instant payers. In addition, banks will have to adjust their processes for detecting suspicious money laundering transactions to avoid unnecessarily slowing down certain payments.

Finally, payment providers will have to develop a new service that allows the payer to verify the name of the payee, equivalent to that already offered when making a Bizum. This change will clearly help prevent payment fraud and reduce the risk of transfer errors, which was identified by the European Commission as one of the reasons why some customers were reluctant to use this type of service.

However, it is not yet apparent what the combined effect of all of the above impacts will be or even to what extent these will accelerate the adoption of immediate payments or payment solutions based on this service in Europe.

Of course, since it is a European regulation, in order to assess its impact it will be necessary to take into account its net effect in all EU countries. However, we will have to wait for a reasonable period of time until all its requirements have been applied and implemented, which will be staggered over the course of 2025 in the euro zone countries and somewhat later in the rest of the EU Member States.

In any event, the Spanish experience seems to demonstrate that the type of intervention chosen, taxation via regulation, was not the most efficient of those available, as market dynamics can promote a rapid adoption of instant payments and related payment solutions.