2015-12-08
Prospect for next-generation payment system — real-time payments for 24/7 without closing days
The Bank of Lithuania has introduced a next-generation retail payment system, which is in line with the Single Euro Payments Area (SEPA) requirements. The system is adapted to executing real-time payments for 24/7 throughout the year without closing days, whenever the financial institutions connected to the system are ready for that.
‘The global payments market is changing fast, and Lithuania is not lagging behind in global payment service innovations. The Bank of Lithuania’s retail payment system, which was launched today, will enable customers of financial institutions to provide up-to-date payment services with a new level of quality and it will be solely up to the financial institutions themselves to seize this opportunity,’ says Marius Jurgilas, Member of the Board of the Bank of Lithuania.
According to M. Jurgilas, if financial institutions, participating in the system, are ready and willing, the Bank of Lithuania, which is operating the new retail payment system, will give them the opportunity to provide real-time payment services. It means that funds transferred to customers of financial institutions participating in the system will be credited in real time for 24/7 throughout the year without closing days. Currently, crediting the beneficiary account, when the payer’s account is at a different bank, can take up to one hour when the payment is executed during business hours, and up to several days when the payment is executed after working hours before a weekend or on banking holidays.
With the new system, the Bank of Lithuania is also aiming to increase competition in the payments market: the opportunities to use the system’s facilities are provided not only to banks, but credit unions, payment and electronic money institutions, operating both in Lithuania and abroad, as well. Up to now, the non-SEPA system LITAS-MMS did not support an indirect participation model, thus these institutions did not have access to the payment systems and were forced to use banking services.
The first payments within the new Bank of Lithuania-administered system were executed smoothly on 8 December. The new retail payment system is connected to the network of European retail payment systems and pan-European automated clearing houses, i.e. payments executed via it will reach equally fast all payment service providers operating in SEPA (all EU countries, Norway, Iceland, Lichtenstein, the Principality of Monaco, Switzerland and San Marino) and their customers.