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The Central Bank of Malta’s (CBM) public consultation aims to encourage wider use of digital payment methods and reduce reliance on cheques, marking a vital step towards a more competitive EU-wide payments environment.
The proposed , open for consultation until December 19, 2025, are designed to align Malta’s payments landscape with evolving European standards, particularly following the introduction of the EU’s Instant Payments Regulation (IPR).
The central bank has introduced these changes to promote instant payments as a faster and safer alternative to traditional paper-based instruments.
Among the key reforms proposed are a reduction in cheque validity from six to three months to encourage quicker settlement and reduce outstanding obligations; a prohibition on cheque encashments, requiring all cheques to be deposited into a payment account to enhance financial data integrity and ensure compliance with anti-money laundering (AML) frameworks; and an increase in the minimum cheque issuance amount from €20 to €50 to promote electronic payment options for smaller transactions.
The proposals also include ensuring faster access to funds, with proceeds from CBM or drawee institution cheques to be made available by the next business day, or instantly if deposited in person at the counter.
The CBM is also calling for banks in the country to recalibrate payment charges to make instant credit transfers more accessible and affordable, in line with IPR compliance requirements.
In addition, the consultation is seeking feedback on the potential development of a national mobile proxy look-up service. This would allow users to make payments using familiar identifiers such as mobile phone numbers, simplifying the process of initiating transfers.
Modernising the payments ecosystem
According to the CBM, cheque usage in Malta has declined sharply in recent years, from around nine million cheques issued in 2019 to just two million in 2024.
The consultation follows legislative changes introduced earlier this year prohibiting salary payments in cash to third-country nationals, a measure that further reinforces the country’s shift towards electronic payments.
The CBM emphasised that the new proposals aim to modernise Malta’s payments ecosystem while ensuring a smooth and inclusive transition away from cheques.
By encouraging the shift from cheques to instant credit transfers, the central bank is, in effect, building the infrastructure to enable account-to-account (A2A) payments.
Once instant payments become cheaper, faster and more reliable, as stipulated under the IPR, merchants and service providers will have a strong incentive to adopt A2A options for bills, e-commerce and point-of-sale (POS) transactions.
The outcome could be consumers paying businesses directly from their bank accounts, bypassing card fees entirely.
The CBM’s proposed mobile proxy look-up service, where users can send payments using a phone number instead of an IBAN, is also a classic enabler of A2A payment convenience.
Similar systems in Sweden (Swish), Denmark (MobilePay) and the Netherlands (iDEAL) have helped normalise A2A payments by making transfers as simple as sending a message.
If implemented nationally, Malta could see a surge in peer-to-peer (P2P) and merchant A2A payments, helping to drive a more digital and competitive payments environment.
Aligning with Europe’s evolving payments framework
Malta’s consultation has been launched as the EU is moving into a new era for payments regulation, underpinned by the implementation of the IPR and the forthcoming Payment Services Directive 3 (PSD3) and Payment Services Regulation (PSR).
Together, these initiatives aim to harmonise standards across the Single Euro Payments Area (SEPA), strengthen consumer protection and promote greater competition and innovation in retail payments.
By moving to end cheque usage and prioritise instant credit transfers, Malta is pre-empting the structural adjustments that PSD3 and the IPR will require across the EU.
The CBM’s focus on accessibility, interoperability and consumer convenience also reflects the policy goals of the European Commission’s , which seeks to ensure that all Europeans can send and receive instant payments seamlessly, safely and at low cost.
For national regulators, such measures also carry a supervisory dimension. Instant payments generate richer and more traceable data than traditional instruments, supporting AML monitoring and financial transparency objectives.
The CBM’s proposals, particularly on cheque deposit requirements and data integrity, therefore sit comfortably within the EU’s broader efforts to tighten oversight while fostering innovation.
As EU institutions move towards full implementation of PSD3 and the IPR, Malta’s early alignment may give its financial sector a head start in adjusting systems and customer practices. q
It also signals how smaller member states can contribute proactively to building a more cohesive and competitive European payments landscape where instant, cross-border A2A transactions are standard.
