Real-time payments to be introduced in several eurozone countries this fall
While a fixed a date for implementation in Estonia has yet to be determined, it is planned that real-time bank payments will be introduced in several euro area countries at the end of 2017, the Bank of Estonia announced on Thursday.
Currently there is no system for real-time payments in place in the euro area, but several projects exist that would let client payments move between banks in real time, as they already do within banks. A real-time payment service will be available in the euro area beginning at the end of 2017, with commercial banks in each country deciding whether and when to introduce the service, said Tiina Soosalu, an official at the Bank of Estonia's Payment and Settlement Systems Department.
Several euro area countries will launch the service at the end of this year. Commerical banks in Estonia are also preparing to provide the service, but no date has yet been set for its launch, Soosalu noted.
The experiences of the U.K., Denmark and Sweden demonstrate that there is a lot of demand in the market for real-time payments. The instant payments system was first launched in the U.K. in 2008 and approximately four million payments per day are made via the system, accounting for one fifth of all cashless payments. A similar payment system was launched in Denmark in 2014, and from its launch it began handling 100,000 payments per day, or one tenth of all payments made in Denmark each day. The six biggest banks in Sweden began using a real-time payments system in 2012; the system has over five million users, accounting for more than half of all Swedes.
Payments within banks are currently made in real time in Estonia, while payments between banks are made five times per day on weekdays. As the banking sector in Estonia is highly concentrated, two-thirds of payments are made within banks. A daily average of 123,000 interbank payments accounting for a total turnover of €145 million were made last year.
According to Estonia's central bank, payments in real time would be good news for merchants waiting to receive money. While card payments are extremely popular in Estonia, paying by card can mean that the merchant only receives the money the next day. Moreover, money from card payments made on a Friday evening only reaches the merchant on Monday morning in most banks. This means that both bank clients and merchants alike would benefit from real-time interbank payments.
Editor: Aili Vahtla
Source: BNS
