Cyprus to launch 10-second bank transfers by 2025

The Association of Cyprus Banks on Monday announced that interbank and cross-border transactions will soon be completed in just 10 seconds, with the service being available round-the-clock.

The new service will come into effect on January 9, 2025 and cover all banks in Cyprus and the single euro payments area (SEPA).

“Customers will be able to receive instant payments from any bank in Cyprus or the SEPA zone in significantly less time compared to traditional bank transfers,” stated the association.

Currently, standard transfers take one to two days to process.

The new system will see funds transferred from the payer’s account to the recipient’s within just 10 seconds, regardless of the country of origin.

The initiative aligns with the European Regulation on Instant Payments, which has already come into effect.

Banks must comply with two key implementation deadlines, on January 9 2025, and October 9 2025.

“Banks are required to upgrade their electronic systems to include enhanced security measures aimed at preventing errors, detecting fraud, and identifying suspicious transactions,” the association explained.

One such measure, the ‘Verification of Payee’ feature, will be introduced by October 9, 2025.

This provision ensures that before finalising a payment, payers will have the legal right to confirm that the account number or IBAN matches the intended recipient’s name.

“This will help avoid errors and fraud attempts,” the association said.

The regulation also stipulates that banks cannot charge higher fees for instant payments than they do for standard transfers.

Furthermore, banks have the option to provide additional services to enhance customer experience.

These could include a voluntary mobile app allowing instant money transfers using just the recipient’s phone number or email address instead of an IBAN.

Banks in Cyprus are currently studying the feasibility of such a platform, which could launch by mid-2025 if successful.

“The regulation aims to enable faster and more secure payments for individuals and businesses across the SEPA zone,” the association concluded.

Moreover, charges for instant payments will remain in line with those for existing transfer methods.

This announcement follows a statement from the Central Bank of Cyprus (CBC) on December 10, saying that the EU Instant Payments Regulation aims to accelerate the adoption of instant payments across Europe.

According to the CBC, banks in Cyprus must enable the receipt of instant payments by January 9 2025, aligning with the regulation’s goal to modernise financial transactions.

By October 9 2025, banks must also offer the capability to send instant payments, while payment institutions and electronic money institutions have until April 9 2027 to comply fully.

The CBC also said that payment service providers (PSPs) must ensure instant payments are offered through the same channels as standard transfers by October 2025, with charges capped at standard rates from January 2025.

Furthermore, starting January 2025, PSPs must screen customer databases daily against EU sanctions lists to ensure compliance with restrictive measures.

The payee verification service, enabling customers to confirm recipient details, is another regulatory requirement for October 2025.

Supplementary services, such as additional apps or features, remain optional.

SOURCE: CYPRUS MAIL