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“This improvement in the speed of payments is very important for Eesti Pank. After euro payments started to be made in the same way throughout the European Union, interbank payments in Estonia became slower. Eesti Pank has been dealing with this concern, in order to at least return to the previous standard and to find a better solution”, said Deputy Governor of Eesti Pank Madis Müller adding that there was more good news.

“The operator of the interbank clearing system EBA Clearing has extended its settlement system in Estonia to allow banks to send interbank payment data early in the morning as was proposed by the Estonians. As a result bank clients now receive the money in their accounts at 9.00am, not 11.00. Some 30% of all the payments made during the day are made in the morning, and earlier it was only 21%, which shows how necessary this change is for Estonian banks and their clients”.

He further explained that bigger changes in the speed of payments are to be expected by the end of next year throughout Europe. “The plan is for transfers between banks to start to be made in real time. Work has started on this at central banks, commercial banks and clearing houses. Whether the plans prove successful, when the work can be done by and when exactly end users will be able to use the service is something we will find out next year”.

After the changeover to SEPA in 2014, the European Retail Payments Board* proposed that Europe should have at least one payment solution that worked in real time, all year round, and round the clock. The rules for the solution are being written by the European Payments Council**, and the clearing system participants should be ready to build the infrastructure by November 2017. After that, banks will be able to design and develop solutions for their clients.

The Estonian Payment Forum also discussed current topics relating to settlements in Europe and the current state of legislation in Estonia, the innovative user authentication system SMART ID, and instant payment solutions in Estonia.

Background Information

At the end of 2014, SEB together with the all the other commercial banks operating in Estonia presented proposals to Eesti Pank for a changeover to the STEP2 interbank payment settlement system operated by EBA Clearing, which was asked to enable banks additionally to send payment orders to the system early on the morning of business days. In December last year EBA Clearing approved this, and it rolled it out this November.

Eesti Pank has focused closely on improving the speed of payments since accession to the SEPA on 1 February 2014. From that date interbank payments started to be made five times a day in Estonia, instead of the earlier ten. This meant that interbank transfers became slower for people in Estonia. Problems also arose for technical reasons that meant not all the banks were able to send early morning payments to other banks. As a result payments initiated at the end of some days only reached the other bank at 11.00 the following morning. After EBA Clearing upgraded the system, banks are able to settle payments earlier in the morning.