Banks, EU – Baltic States, Financial Services, Latvia, Legislation

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.

Kaspars Cikmacs, Member of the Board of Citadele Banka said that as of today, the customers of Citadele Banka will be able to make instant payments to many European banks and to SEB Banka accounts in Latvia. The initial limit for an instant payment is set at EUR 30. This limit will be gradually raised to reach EUR 15 000 which is the maximum limit for instant payments. "The fee applied to instant payments will be the same as the one applied to regular payments, as we want our customers to benefit from the advantages of the new system and enjoy fast interbank transfers," he said.

Arnis Skapars, Member of the Board of SEB Banka said that according to the bank’s estimates, over 98 percent of payments will be completed immediately once Latvia's major banks have connected to the instant payments system. „We are happy to be among the frontrunners offering their customers an opportunity to make fast money transfers to other banks in Europe. As of today, the customers of SEB Banka in Latvia and Estonia can already receive instant payments from other banks that have connected to the instant payments system. We are also running parallel tests on making instant payments: this service will be available to our customers as of the beginning of December. Initially, the customers of SEB Banka will be able to make instant payments via the internet bank and the mobile application, but the service will be also available through other electronic channels soon thereafter," he said.

Swedbank, the largest Latvian commercial bank in terms of the value and volume of customer payments, also intends to offer this service as of the beginning of 2018, following the completion of infrastructure and functionality tests.

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.