With the instant payment system RT1 of EBA Clearing, a company established by European banks, going live yesterday, the pan-European instant payments infrastructure is being launched, the Bank of Latvia reported LETA. This pan-European solution is connected to the instant payments infrastructure introduced by Latvijas Banka in August. This means that, as of November 21st, instant payments are available between the customers of Citadele Bank and the customers of the European banks that have joined the above-mentioned RT1 system (these include ABN AMRO, Bankia, Erste, Intesa Sanpaolo, Raiffeisen, SEB, Unicredit banking groups).
“This is a big step forward in introducing instant payments throughout Europe. It is an important innovation, as previously transfers of money between different euro area countries took a relatively long period of time. Moreover, it was impossible to make a transfer on weekends and holidays. As of now, a transfer, for example, between Germany and Latvia will happen in a matter of seconds,” said Harijs Ozols, Member of the Board of the Bank of Latvia.
Today instant payments are being launched throughout Europe and are gradually becoming available also between the customers of two major Latvian commercial banks, Citadele Bank and SEB Banka, which connected to the RT1 system today. “Customers will no longer have to wait for hours to get their money, transactions will be completed within a flash of an instant, on any day and any hour of the day,” he said.
Instant payments are funds transfers provided 24 hours a day, 7 days a week, 365 days a year, including holidays and weekends. Customer payments are executed within a few seconds and the money received can be reused immediately. This is a very significant change as previously payments between European banks were only available on business days and a transfer took several hours. The electronic clearing system (EKS) of the Bank of Latvia has been providing an opportunity for Latvian credit institutions to offer instant payments to their customers since August. Citadele Banka was the first to connect to the instant payments system.
The Bank of Latvia organizes and maintains the payment infrastructure in Latvia, including two automated payment systems helping to ensure interbank settlements in euro. TARGET2-Latvija is one of the component systems of the Trans-European Automated Real-time Gross Settlement Express Transfer system, whereas the EKS is used for the processing of retail interbank payments, including instant payments.
