Interbank and interstate transactions will be executed in 10 seconds, seven days a week and 24 hours a day, by all banks in Cyprus and the SEPA zone (EU member states and other countries including the UK), starting on January 9 2025, the Association of Cyprus Banks (ACB) said on Monday in a press release.

The Association noted that that bank customers will be able to receive instant payments from any bank in Cyprus or the SEPA zone in much less time than normal bank transfers. In particular, the time to complete a payment from the payer's account to the payee's account will be limited to just 10 seconds, regardless of the country where the payment is sent, whereas today the corresponding time is one to two days. Instant payments will be implemented in all countries in the SEPA area, which are the 27 EU member states plus 9 other countries, including the UK.

Under the "European Direct Payments Regulation", which has already entered into force, banks are required to upgrade their electronic systems with more security safeguards, aimed at avoiding errors, preventing fraud, or detecting "suspicious transactions".

For example, the provision for "Verification of Payee", with an implementation timeline of  October 9 2025, states that before pressing the button to complete an instant payment, the payer will have the legal right to know that the account number (or IBAN) they have filled in corresponds to the correct name of the Beneficiary they wish to send the money to, both inside and outside Cyprus. In this way, errors or attempts at fraud will be avoided. It is noted that the limit for transferring money via instant payments is set by each bank individually, as it is not provided for by the Regulation.

Another provision of the Regulation, with an implementation date of January 9 2025, requires banks not to charge higher fees to their customers for executing instant payments than for normal, existing payments for transfers.

In addition, the Regulation allows banks to offer some additional services to their customers for their convenience, which are not mandatory. One of these, is the voluntary creation of a common platform, like a mobile app, from where the customer will be able to send money to any bank within Cyprus, with immediate processing, using the Beneficiary's phone number, or email address, instead of their IBAN. At this stage, the banks are currently in the study stage, for the creation of this platform in Cyprus, which, if all goes well, is expected to be operational in mid-2025.

The Association of Cyprus Banks noted that the Regulation aims to provide faster and more secured payments, for citizens and businesses, from all SEPA countries, and with fees which will not exceed the existing ones for ordinary bank payments.