CENTROlink: record surge followed by further growth in supply of payment services
The Bank of Lithuania has expanded the range of services within its payment system CENTROlink, offering eligible non-banks a gateway to TARGET2 and, in turn, access to more than 50,000 banks worldwide.
“With its wide geographical coverage, CENTROlink reflects the needs of the growing market, particularly in terms of instant payments which are rapidly gaining traction across Europe. In 2019, we saw record highs with the doubling in the number and value of payments as well as a more than 70% increase in the number of CENTROlink participants. This year, we will keep making headway in the same direction,” said Marius Jurgilas, Member of the Board of the Bank of Lithuania. He also stressed that in order to get access to CENTROlink, market participants have to undergo a thorough assessment, while participants that breach the set rules are subject to severe sanctions.
CENTROlink payment service providers – non-banking financial entities (electronic money and payment institutions) – will be able to send and receive real-time payments via the TARGET2 system starting from February 2020. TARGET2 is the real-time gross settlement system owned and operated by the Eurosystem and intended for the settlement of large-value payments in euro. More than 1,000 banks use the system to initiate transactions in euro. Taking into account their branches and subsidiaries, more than 52,000 banks worldwide can be reached via TARGET2.
In 2019, nearly 43 million payments (in 2018 – 21 million) were made within CENTROlink, with their value reaching €88 billion (compared to €43 billion in 2018). These numbers exceed the historic high of 33 million payments recorded in 2015 when the payment system of the Bank of Lithuania was also used by the major Lithuanian banks. Such trends helped to foster competition within the sector. At the beginning of 2020, two banks (TBI Bank EAD and Ferratum Bank p.l.c.) started providing instant payment services through the CENTROlink platform. Moreover, the Bank of Lithuania has been cooperating with other foreign banks as well.
Access to CENTROlink is granted only to financial institutions of impeccable reputation – since 2016, nearly 50 applications have been rejected after risk assessment procedures. The activities and transactions of system participants are closely monitored and, in case of any doubts regarding adequacy of their operational risk and anti-money laundering management measures, access to the system may be suspended or terminated. This is already evidenced by the fact that nearly 10 institutions have been suspended from participation in the payment system.
CENTROlink is a payment system operated by the Bank of Lithuania that provides technical access to the Single Euro Payments Area (SEPA) for all types of payment service providers – banks, credit unions, electronic money or payment institutions – licensed in the European Economic Area. Once participants of the CENTROlink system, they can offer instant payments 24/7/365, as well as standard credit transfers and direct debit services.