Major changes to how bank transfers work must be in effect by Thursday

Major changes to bank account transfers have come into effect over the weekend and must be available to all Irish banking customers by Thursday. 

New regulations around SEPA or instant transfers and Verification of Payee have come into force with some notable changes taking place.

SEPA or instant payments mean that transfers will take no more 10 seconds no matter what day or time it is. 

It will work in a similar way to Revolut in that it will no longer take a few days to send money, regardless of if you and the person you are sending it to are with different banks. 

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“You will see this new option for a SEPA instant payment and what you’ll be able to do is… make a payment to any other bank outside your bank, in Ireland or across the whole of Europe, within 10 seconds,” Gill Byrne, Head of Payments at the Banking and Payments Federation of Ireland, said on Newstalk this morning. 

She outlined how most banks will provide people with the option of an instant or regular payment, and choosing the instant one will cost you no extra. 

“It was back probably about two years ago at this stage where Europe launched the instant payments regulation and mandated that by Thursday all providers in Europe have to adhere to instant payments,” Gill added.

There are roughly 27 other states involved meaning that if you are transferring to one of those, you will have the option to do so instantly.

Apparently the change is "massive" and "significantly complex" but it was have "really positive" impacts for Irish customers.

The other change people will notice is the new 'verification of payee' system. 

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It means that when transferring money to someone, you now must input their name exactly as it appears on their bank account.

For example, when paying your rent, you will now have to enter your landlords full name rather than just putting "rent" on the transfer.

It has been described as the "name-matching feature" and has been introduced to prevent money laundering and people being scammed. 

Three quarters of the Irish population have said that they are nervous about transferring money to the wrong person and this has been introduced to provide some ease of mind.

“It’ll match the name of the payment that you’re making to the IBAN, it’ll send a message to the bank of the recipient or of your payee, and it will check to see if the name that you’ve input with the payment matches the name held on their bank account,” Gill said.

Your bank will tell you before you make the payment whether it’s a match, close or partial match, or no match.

If you receive a no match message, it’s up to you to decide whether to proceed with the payment.

However, it’s recommended that you go to the person you are going to pay and validate their details.

"What this does is it provides greater assurance that the person you are intending to pay is the person you are paying," Gill added.

She added that fadas should not result in a no match whether they are included or not on both sides.

For more information, you can visit the recently launched Payrightnow.ie website.