Circular Letter No. CC/2024/00000051

Circular Letter No. CC/2024/00000051
Sent to:
Credit Institutions, Payment Institutions and Electronic Money Institutions.
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Subject: Obligations related to the provision of euro instant transfers

The legal and regulatory framework for euro instant transfers has recently undergone significant developments at the European and national levels, introducing new obligations for the provision of this payment instrument by payment service providers (PSPs), requiring them to implement relevant changes in the near future.

With a view to ensuring the full and timely compliance of the national market with the new regulatory framework, this Circular Letter outlines the obligations that PSPs must observe as a result, on the one hand, of the publication of the Regulation on euro instant transfers and, on the other hand, of the application of the SEPA Regulation and the Interbank Clearing System (SICOI) Regulation.

A. Regulation on euro instant transfers

Regulation (EU) 2024/886 of the European Parliament and of the Council of 13 March 2024 amending Regulations (EU) No 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366 as regards instant credit transfers in euros (IPR, from the English Instant Payments Regulation) establishes the following obligations for PSPs:

i) Mandatory offer of euro instant transfers for all PSPs offering traditional euro credit transfers | Deadline: 09/01/2025 (for receiving) and 09/10/2025 (for sending)

PSPs that provide traditional credit transfers to their users must also provide instant transfers. To facilitate the implementation process by PSPs, the IPR provides for a phased approach to comply with this obligation. Thus, PSPs must be able to receive instant transfers by 9 January 2025, and to initiate these operations by 9 October of the same year.

ii) Application of charges equal to or lower for euro instant transfers with reference to corresponding traditional euro credit transfers | Deadline: 09/01/2025

PSPs must apply to instant transfers a cost lower than or equal to that of the corresponding traditional SEPA credit transfers.

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For competent national authorities to assess full compliance with this obligation and verify that PSPs have not circumvented the objective of this requirement by increasing the costs of other operations, PSPs must report to these competent national authorities, among other information, the level of charges related to credit transfers, instant credit transfers, and payment accounts, with the first report, which must be submitted on 9 April 2025, referring to data from the date of publication of the IPR proposal by the European Commission, on 26 October 2022.

iii) Harmonization of the sanctions verification procedure | Deadline: 09/01/2025

PSPs must adapt their procedures to verify, at least daily, the users of each PSP against the European Union sanctions/restrictive measures lists.

iv) Provision of a beneficiary verification mechanism | Deadline: 09/10/2025

PSPs must provide users with a mechanism that allows verification, when initiating instant transfers and traditional credit transfers, whether the beneficiary name entered by the payer corresponds to the intended beneficiary. The IPR also allows the use of beneficiary identifiers other than the name, for the corporate segment, and alternative procedures to confirm the beneficiary, notably when the beneficiary name is not entered by the payer.

B. Migration of transfers initiated through MULTIBANCO Automatic Teller and through MB WAY (PSP app or own app)

The Bank of Portugal issued, in 2022, a Specific Determination, addressed to SIBS FPS, to conform the payment operations provided on the MULTIBANCO network, including on the MB WAY app, with the applicable legislation, namely Regulation (EU) 2015/751 of the European Parliament and of the Council of 29 April 2015 on interchange fees applicable to card-based payment transactions (IFR), and the rest of the applicable regulatory framework, namely Decree-Law No. 91/2018, which approved in annex the new Legal Regime for Payment Services and Electronic Money (RJSPME), by 31 December 2024.

To comply with this Specific Determination, SIBS FPS informed the Bank of Portugal that it will evolve the transfers initiated through MULTIBANCO Automatic Teller (AT) and MB WAY (peer-to-peer operations–P2P) to operations based on the euro instant transfer scheme.

Consequently, these operations must observe, in addition to the IPR requirements detailed in the previous point, a set of additional obligations, in particular:

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i) Requirements established by the SEPA Regulation

These operations will constitute instant transfers and, consequently, must observe Regulation (EU) No 260/2012 of 14 March, which establishes technical and business requirements for credit transfers and direct debits expressed in euros in the Union (SEPA Regulation). In this regard, it is important to highlight, in particular, the obligations regarding the pan-European scope of transfers and the need to ensure that the user can initiate transfers to any IBAN in the SEPA Area, regardless of the channel through which the operation is initiated.

ii) Requirements established by the SICOI Regulation

The Bank of Portugal provides the Account Derivation Identifier and Benefitor/Debtor Confirmation service to PSPs established in Portugal that participate in the instant transfer subsystem and/or the SEPA aspect of the credit transfer and/or direct debit subsystem of SICOI. This service is regulated by Instruction No. 8/2018 (SICOI Regulation) and is composed of three functionalities:

• Account Derivation Identifier (PL) – PSPs participating in the instant transfer subsystems and/or the SEPA aspect of the credit transfer subsystem of SICOI must make this functionality available to their users;
• Single Benefitor Confirmation (COPS) – PSPs participating in the instant transfer subsystems and/or the SEPA aspect of the credit transfer subsystem of SICOI must make this functionality available to their users; and
• Grouped Benefitor/Debtor Confirmation (COPB) – PSPs participating in the instant transfer subsystems and/or the SEPA aspect of the credit transfer and/or direct debit subsystem of SICOI must make this functionality available to their users.

Thus, as soon as the evolution of transfers initiated through AT and MB WAY (P2P) to instant transfers occurs, PSPs are obliged to make available, on these channels, the PL and COPS functionalities to users, as defined in Annex IX of the SICOI Regulation. Specifically, PSPs must provide:

• The initiation of payment operations using the PL functionality – the SICOI Regulation establishes that participating PSPs must allow users to initiate payment operations using this functionality through the remote and in-person channels in which instant transfers are provided in a non-grouped manner (cf. point 5 of Annex IX);
• The COPS functionality to users – the SICOI Regulation establishes that participants in SICOI are obliged to use the COPS functionality when the

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instant transfer is initiated individually and the user is in direct interaction with the participant (cf. point 7 of Annex IX).

The obligations established by the SEPA Regulation and the SICOI Regulation must be observed by PSPs as soon as the evolution of transfers initiated through AT and MB WAY (P2P) to instant transfers occurs.

In preparation for this evolution, PSPs must, by 12 December 2024, report to the Bank of Portugal the date of completion of the evolution of transfers in AT and MB WAY transfers (P2P) to instant transfers, by sending the attached form to the email box sicoi@bportugal.pt.

Annex – Form: Migration of transfer operations in AT and P2P of MB WAY to instant transfers

Annex to Circular Letter of the Bank of Portugal No. CC/2024/00000051
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Annex to Circular Letter No. CC/2024/00000051 - Form: Migration of transfer operations in AT and P2P of MB WAY to instant transfers

Date of migration to instant transfers of the following payment operations To be completed by the PSP

Transfers initiated through MULTIBANCO Automatic Teller Transfers initiated through MB WAY (P2P transfers)

MIGRATION OF TRANSFER OPERATIONS IN MULTIBANCO AUTOMATIC TELLER AND PEER-TO-PEER OF MB WAY TO INSTANT TRANSFERS

Observations

Filling instructions:

• The Payment Service Provider (PSP) must indicate the date of completion of the evolution, to the instant transfer scheme, of the following payment operations: transfers initiated through MULTIBANCO Automatic Teller and P2P transfers initiated through MB WAY (PSP own app or third-party app);
• Any additional observations should be included in the 'Observations' field.