The U.K. branch of listed Estonian financial services group LHV announced on Friday that it has begun providing financial tech (fintech) companies with real-time pound (GBP) payments via the U.K.'s Faster Payments scheme, making LHV the first bank capable of providing real-time euro and pound payments.
The instant euro payments are provided by the Single Euro Payment Area Instant (SEPA Instant) and instant pound payments by the Faster Payments system.
The pound payments service had been operational since May 2019; however, Pay.UK, an organization operating the pound payments in the U.K., delayed the launch due to the requirement for further clarification on various legal questions which arose in connection with Brexit and the future separation from the current common legal framework that Estonia and the U.K. share, the bank said.
To ensure compliance post-Brexit, Estonia's Credit Institutions Act was changed, enabling LHV to launch the pound payment service, which is now available to its clients.
In addition to real-time pound and euro payments, LHV's clients also have access to safeguarding accounts, Virtual IBANs, currency exchange, liquidity services and possible financing via the bank's API LHV Connect interface.
"As of today, Faster Payments is available to our clients, and this marks the official beginning of our business in the U.K.," Andres Kitter, head of LHV's U.K. branch, said. "We have been working toward this moment ever since we expanded to London in early 2018. LHV has thrived in the capital over the past two years — reaching profitability in our first year and tripling our client base to well over 100 fintech clients today."
According to Kitter, LHV is the preferred banking infrastructure provider to companies of all sizes, ranging from small, pre-revenue startups to unicorns with global reach such as TransferWise, Coinbase, Paysafe and Trustly.
"Continuous development of services for our fintech clients is key to our success, and we will continue to respond to market demands promptly by developing bespoke value added solutions, both proactively and reactively," he added.
LHV 'in it for long haul'
"Despite the U.K.'s upcoming exit from the EU, we are confident that London will maintain its position as a fintech capital of Europe," Kitter said. "LHV is in it for the long haul, with plans in place to continue our growth in the upcoming years, providing the best possible services to our fintech clients."
Available 24/7, every day of the year, including bank holidays, the Faster Payments Domestic instant payment network enables near real-time pound payments up to a value of £250,000 per payment. Faster Payments is a U.K. banking initiative established with the aim of reducing payment times between different banks' customer accounts from the standard three working days associated with the BACS system to a few seconds.
Faster Payments is directed toward fintechs and financial intermediaries, enabling them to use real-time pound and instant euro payments via integration with the LHV Connect API. Using this platform, fintechs can make domestic payments both in the U.K. and the area as well as receive an overview of their accounts in real time.
LHV Group is a financial group and capital provider in Estonia. Its key subsidiaries are LHV Pank and LHV Varahaldus. It established a branch in the U.K. in 2018 and is operating in London to service the corporate clients of LHV's financial intermediaries.
LHV employs over 430 people, and provides banking services to some 202,000 clients. Pension funds managed by LHV have more than 177,000 active clients.
Editor: Aili Vahtla