French banks to be obliged to offer free instant transfers - but when?

Instant bank transfers are to be made mandatory throughout the European Union, but in France many banks still charge for the service. We look at when the change required by EU law will apply in France.

French banks have been allowed to offer instant bank transfers of sums up to €100,000 since November 2018. However, some banks charge up to €10 for them, and others do not offer the service at all.

These instant transfers, which take 10 seconds, only apply for ‘occasional’ transfers issued on the explicit request of the account holder rather than standing payment orders.

However, only around one in ten euro credit transfers within the EU is processed as an instant payment, states the European Commission.

In large part this is due to the charges imposed by banks on these transfers.

“When you have to reimburse €15 to a friend, these charges can be dissuasive,” Julien Lasalle, head of analysis at the Banque de France, told Le Parisien.

What is the new European law on bank transfers?

Instant bank transfers represent a major advantage for both individuals and companies, says the European Commission: “These payments can help individuals avoid late fees” and “help companies to manage their cash flow.”

To encourage their uptake, the Commission proposes:

• All services (with very few exceptions) offering euro transfers must offer instant payment solutions

• Instant payments must be charged at the same rate or lower than non-instant transfers

• Providers must offer free IBAN checking prior to instant transfers, and notify the account holder of discrepancies

• Providers will conduct daily screening of their IBAN numbers against the EU bank fraud watchlist

The provisional agreement for the new European law was reached in late November.

“It will likely be approved by the European Council and Parliament in December or early 2024,” said Mr Lasalle.

Once the law is accepted, member states will have 12 months to apply it.

How much do French banks currently charge for instant transfers?

Some online banks such as Fortuneo and BoursoBank already offer free instant transfers.

However, the only traditional bank to currently offer them for free is La Banque Postale, which limits them to transactions up to €1,000.

The Société Générale charges €0.80 for instant transfers of up to €4,000.

Most traditional banks still charge €1, although both the Caisse d’Epargne and the Banque Populaire can charge up to €10 on transfers of €100,000.

These fees will all disappear in 2024 as banks comply with the new EU law.

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