"When other banks start providing instant payments in Estonia alongside SEB, private customers and companies will benefit as funds will start to move between banks within just seconds," Müller said according to a Bank of Estonia press release. "I hope that all banks operating in Estonia will start to offer clients this new and improved payment method within one year at the latest."

According to the deputy executive of the central bank, when instant payments become more widespread, it will allow banks and companies to change to new business models. "It will be possible to develop payment solutions that will make it easier for individuals to settle payments among themselves and pay for purchases in stores or internet stores," he added.

The Single Euro Payments Area (SEPA) Instant Credit Transfer Scheme was launched on Nov. 21, when approximately 600 payment service providers made instant payments available in Austria, Germany, Spain, Italy, the Netherlands, Estonia, Latvia and Lithuania.

Instant payments from one bank to another, limited to a maximum of €15,000 in size, are processed via compliant CSMs within seconds. Clients can make and receive instant payments in banks that have implemented the new scheme.

While the instant payment scheme is voluntary for participating banks and payment service providers, joining the system does require readiness to process payments within seconds 24 hours per day, 7 days per week.

The new payment scheme was established by the European Payments Council.