The European Central Bank (ECB) is moving closer towards its goal to streamline payments across EU Member States and to make those transactions far cheaper.
Reports said Tuesday (Jan. 10) that the ECB is ramping up its effort to develop a real-time cross-border payments system across the European Union and is looking at 2017 as a critical moment in that trajectory. The ECB recently released its roadmap to achieve the goal, reports said, developed by the European Payment Council.
“First, payment service providers will have to deliver instant payment solutions to end users,” ECB Executive Board Member Yves Mersch said regarding that roadmap. “Second, most ACHs will be ready to launch their instant payment clearing systems. And last but not least, the Eurosystem will decide on whether or not to provide a pan-European instant payment settlement service in central bank money to payment service providers.”
According to reports, the ECB estimates that cost-per-transaction won’t be larger than one euro cent, and it has a goal of having financial service providers settle cross-border transactions for a half-euro cent. Reports described that goal as an “ambitious plan” that would significantly reduce the cost of cross-border payments both for banks and end users.
The cost of cross-border transactions has become a topic of debate in recent months. Researchers have highlighted what they consider to be excessive fees charged by banks to complete a cross-border transfer as FinTech innovators have emerged to offer more competitive rates.
Reports noted that the ECB will decide in June whether or not to pursue the development of this service based on the roadmap it has just released.
The launch of a real-time cross-border payment service is only part of the ECB’s broader efforts to improve financial services across the EU. Last year, the ECB announced a plan to create a pan-EU database to track cybercrime at commercial banks and develop an “early warning and analysis system” for those lenders.