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Bank of Latvia prepares for instant payment introduction in Europe

On Friday, 27 October, the Council of the Bank of Latvia performed amendments to multiple regulations in preparation for the introduction of instant payment system across all of Europe.

Regulations were amendments to ensure successful realization of payments between Bank of Latvia clearing system and EBA clearing system RT1.

Since August, the bank’s clearing system has provided Latvian credit institutions the opportunity to offer clients faster payment processing. Citadele Bank was the first to connect to the instant payment system, as reported by the Bank of Latvia.

Instant payments are money transfer operations that are performed 24 hours a day, seven days a week and 365 days a year, including holidays. Payments are processed within several seconds, allowing recipients to use the money immediately. This is very significant change, because until now transactions between banks in Europe were only available on workdays and usually took several hours to process.

On 21 November 2017, EBA Clearing’s fast payment system RT1 will come online. SEB Bank has plans to join this system on the same date. This means instant payment processing system will become available to Citadele and SEB Bank clients in Latvia and clients of European banks that joined RT1 system.

Once infrastructure and functionality tests are completed, this service will be introduced for clients of Swedbank.

The Bank of Latvia reports that it organizes and maintains the payment infrastructure in Latvia, including two automated payment systems that ensure processing of payments between banks.

TARGET2-Latvia system is a component system of Trans-European Automated Real-time Gross settlement Express Transfer system.

In 2016, TARGET2-Latvia processed 429.2 thousand payments worth EUR 235.1 bullion. ECS system processed 40.3 million payments worth EUR 54.0 billion.

In the first half-year of 2017, TARGET2-Latvia system processed 225.3 thousand payments worth EUR 116.1 billion, whereas ECS system processed 20.9 million payments worth EUR 26.7 billion.


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