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Instant money transfer explained: Speed, rates and advantages
Pay by bank transfer in 10 seconds. It's now possible, thanks to instant transfers. Also known as "Instant Payment", this major financial innovation is revolutionizing the world of banking transactions by enabling funds to be transferred from one account to another without delay.
In this article, dive into the world of instant transfers, discover how they work, their advantages and rates, and learn how to integrate them wisely into your financial operations.
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What is an instant transfer?
Instant transfers are an innovative way of transferring money, enabling virtually instantaneous transactions between bank accounts. Unlike conventional bank transfers, which often take several hours or even days, instant transfers are executed in a matter of seconds, offering unrivalled speed.
This service is made possible by the Single Euro Payments Area (SEPA) system, under the aegis of the European Central Bank.
Why choose instant transfer as a payment method?
Opting for instant money transfer has many advantages. It facilitates money transfers between friends, payments for services and even money movements between personal and business accounts.
It's faster than a traditional transfer. With an instant transfer, the beneficiary receives the funds immediately (unlike traditional transfers, which can take several hours or days). Instant transfers can be carried out any day of the week, including weekends and public holidays.
If you're making a purchase, for example, your order will be processed and dispatched more quickly than with a "traditional" bank transfer.
What are the advantages of instant transfers for businesses?
Collecting payments by instant transfer offers companies several advantages. On the one hand, they get the funds they need for their operations faster, whether for bill payments, salary payments or commercial transactions.
On the other hand, for those with a commercial activity, they gain in responsiveness and can serve their customers more quickly. And improve customer satisfaction!
A word of clarification: although funds are collected immediately, companies still need to reconcile the payment with the corresponding order. To automate this task, third-party solutions exist, such as the Fintecture transfer solutions.
How Instant Transfer works
How does instant transfer work?
The instant transfer works in the same way as the traditional SEPA transfer. You can do it via your mobile banking application or your online customer area. When you set up your transfer, you can choose the "instant transfer" option. When this service is free, it is often selected by default (provided that the transfer is compatible with your bank's limits).
Payment solutions such as Fintecture also use this payment method. To do so, they use APIs provided by banks. This is particularly the case when you pay by Fintecture Immediate Transfer.
If your bank offers instant transfer, the payment amount is compatible with your limits and instant transfer is free of charge, this is the transfer method we prefer. Otherwise, the payment is made by conventional SEPA credit transfer. However, our in-depth knowledge of banks means that in most cases we can provide the merchant with immediate payment confirmation.
Can I cancel an instant transfer?
Unlike conventional transfers, it is not possible to cancel an instant transfer. Once the transaction has been initiated, it is irreversible.
In the event of an error, you will need to contact the beneficiary of the transfer to find an amicable solution. It is therefore essential to check the details carefully before confirming the transaction.
The limits of instant transfers: amounts and frequency
Since July 2020, the Banque de France has capped instant transfers at 100,000 euros. But for security reasons, banks are setting much lower ceilings, as well as frequency limits.
Limits generally vary between 1,000 and 15,000 euros. You can ask your bank to raise the limit.
Rates and Compatible Banks
Comparison of transmission and reception rates
Receiving payment by instant transfer is free of charge. Issuing an instant transfer, on the other hand, may be subject to a charge.
Instant transfer rates vary from bank to bank. While some banks offer this service (Banque Postale, Revolut, BforBank...), others still charge for instant transfers, usually per transaction. The average cost is around 1 euro per transfer.
But things are set to change rapidly. On February 7, 2024, the European Parliament adopted the Regulation on Instant Transfers. Within a few months, instant transfers will become compulsory in Europe, and will cost no more than conventional transfers. It will therefore be free of charge almost everywhere.
Which banks offer instant transfers?
Most banks now offer instant transfers. The few banks that do not offer this service will do so in the near future. More than just a trend, this is a European obligation to which all banks are subject.
The difference is currently in the rates for this service. But here too, the differences will disappear, as instant transfers will eventually become free of charge.
How do you activate the service on your bank account?
Activation of the instant transfer is usually done online, via your customer area. Simply follow the instructions provided by your bank and confirm your wish to use this service.
Safety and reliability
Instant transfer security: guarantees and measures
Instant transfers are subject to the same strict security standards as other banking transactions. Banks use advanced encryption protocols to protect your sensitive financial information and guarantee the confidentiality of your transactions.
Moreover, instant transfers are subject to the same anti-fraud measures as traditional transfers.
Finally, payment institutions such as Fintecture are developing anti-fraud systems to complement those set up by banks. This dual protection ensures the best possible protection for both the sender and the beneficiary of the transfer.
How can you protect your online transactions?
Unfortunately, when it comes to payment fraud, there's no such thing as zero risk. Faced with the roll-out of strong authentication (mandatory for payments), fraudsters have developed new techniques known as social engineering to get their victims to validate fraudulent payments.
Faced with these new practices, we recommend that you redouble your vigilance. In particular, make sure your device is equipped with the latest security updates, and use complex passwords to access your banking application. And if you have any doubts about a payment or invoice, contact your bank or the creditor.
Take the time to consult the best practices presented on the official government website: https://www.cybermalveillance.gouv.fr/
Outlook for instant transfers in France
With the constant evolution of financial technologies, instant transfers are likely to continue to grow in popularity in France. Between 2021 and 2022, the number of instant transfer payments increased by 85% in volume and 138% in value. This trend is set to continue in the years ahead.
In fact, this method of transfer offers a convenient, fast and secure payment solution for both private and business customers.
Its ease of use, speed and security guarantees make it an essential payment method for both day-to-day and larger transactions.
Boosted by regulations that are pushing in its favor, the SEPA instant credit transfer will gradually become the norm in France and Europe.
Conclusion
The instant transfer represents a major advance in the field of banking transactions. Its speed of execution makes it an efficient and secure payment option for many financial situations.
Before opting for this solution, it's essential to understand how it works, its advantages and the associated fees. By choosing instant transfer, you can be sure of benefiting from a modern, efficient means of payment, while maintaining constant vigilance to ensure the security of your financial transactions.
Do you have a business and want to offer your customers the option of paying you by instant transfer? Discover our Transfer Immediate Transfer solution and simplify your bank transfer payments with a streamlined customer process, with no IBAN entry required.
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