Luxembourg implements EU Regulation on Instant Credit Transfers in euros

On 4 April 2025, Luxembourg adopted a new bill, taking an important step towards implementing Regulation (EU) 2024/886 of the European Parliament and of the Council of 13 March, which will affect instant credit transfers in euros.

What is the EU Regulation about?

• The aim of the Regulation (EU) 2024/886 is to enhance the efficiency and accessibility of instant credit transfers in euros across the EU.
• It establishes uniform rules to prevent market fragmentation and reduce compliance costs, ensuring all payment service providers offer instant credit transfers 24/7.
• It limits charges for instant credit transfers so they’re no higher than for regular credit transfers. And it introduces a service for verifying the payee to prevent fraud and errors.
• It sets out procedures for payment service providers to comply with targeted financial restrictive measures efficiently.
• These changes will help fintechs and new players to participate in the EU's instant payments ecosystem. And it will make services more widely available.

How is the EU Regulation implemented in Luxembourg?

The Bill aims to amend the modified law of 10 November 2009 related to payment services in Luxembourg. The key changes are:

• Instant payment obligations: payment service providers offering regular transfers in euros will also have to offer instant euro payments, both sending and receiving, by 9 April 2027.
• Protection of funds: Payment service providers and electronic money institutions can now protect user funds by depositing them in a central bank account, in addition to existing options like credit institutions or low-risk investments.
• Access to payment systems: Non-bank payment service providers and electronic money institutions get direct access to designated national payment systems, ensuring fair competition and stability.
• Governance and risk management: Enhanced requirements for governance, internal control mechanisms, and risk management for payment service providers and electronic money institutions participating in payment systems.
• Sanctions for non-compliance: Introduction of administrative sanctions for violations of technical and commercial requirements for euro transfers, including fines and other penalties.
• Verification services: Mandatory implementation of services to verify the match between the payee's name and account identifier (IBAN) to prevent fraud and to follow harmonised sanction screening rules.
• Notification and compliance: Payment service providers have to notify the CSSF (Commission de Surveillance du Secteur Financier) at least two months before participating in designated payment systems, providing necessary compliance information.

How can DLA Piper help?

If your business falls under the scope of the regulation, we recommend you proactively assess the impact of the upcoming changes on your operations.

You should:

• review and update internal governance, compliance, and risk management frameworks to align with the new requirements, including fund safeguarding options, participation in payment systems, and sanction screening procedures;
• evaluate your technical readiness to implement instant credit transfer functionalities, including IBAN-name verification services; and
• prepare documentation and internal processes to ensure you can notify the CSSF on time if you intend to join designated payment systems.

We encourage you to initiate this review well ahead of the April 2027 deadline to ensure smooth and compliant integration into the evolving instant payments landscape.

Please feel free to reach out to any of the authors of this article for further information.