Cyprus is set to transform its banking system significantly by introducing a new instant payment infrastructure. Starting from January 9, 2025, interbank and cross-border transactions will be completed in a mere 10 seconds, a drastic reduction from the current one to two days required for such transfers. This groundbreaking service will also operate continuously, providing convenience for users at all times.
The initiative, announced by the Association of Cyprus Banks, will encompass all banks within Cyprus and those participating in the Single Euro Payments Area (SEPA). It promises customer benefits by allowing instant payments from any bank in Cyprus or across the SEPA zone, thereby enhancing the speed and security of transactions for both individuals and businesses.
While the process will be expedited significantly, the costs associated with these money transfers will not change. Regulations dictate that banks must charge the same fees for instant transfers as they do for standard transactions.
Cypriot banks will also have the opportunity to introduce additional optional services. For instance, customers will be able to transfer money using the recipient’s phone number or email address instead of the traditional International Bank Account Number (IBAN), making transactions even more accessible.
This development aligns with a European regulation on instant payments that was enacted in April of the previous year. However, the implementation of this new infrastructure in Cyprus is set to take place shortly thereafter.
Security improvements are also a priority for the banks on this Mediterranean island. They are required to enhance their systems by a deadline of October 9, 2025. Part of this upgrade will ensure that payers have the legal right to verify whether the account number or IBAN corresponds accurately with the recipient’s name. The aim is to reduce errors, prevent fraud, and identify suspicious transactions more effectively.
Under directives from the Central Bank of Cyprus, banks must be ready to accept instant payments by the designated date in January 2025, and by October 2025, they must also facilitate instant payment sending. Further compliance is anticipated, with all payment and electronic money institutions given until April 9, 2027, to fully align with the instant payment regulations.
Overall, these enhancements mark a significant shift in the financial landscape of the country, enabling quicker, safer, and more efficient transactions for both consumers and businesses alike. The focus on security and the simultaneous introduction of user-friendly features promise to deliver a modern banking experience to users in Cyprus and beyond.