Instant payments

The instant payment service established within the framework of Latvijas Banka's EKS provides an opportunity for banks to offer instant payments to their customers to transfer money from an account in one bank to an account in another bank within a matter of seconds on any day and at any time of the day. A possibility to make instant payments within SEPA – the Single Euro Payments Area – through access to both RT1 and the TIPS platform is ensured.

In Latvia, instant payments are offered by Latvijas Banka and eight credit institutions (AS Citadele banka, AS SEB banka, Swedbank AS, Signet Bank AS, AS BlueOrange Bank, AS Reģionālā investīciju banka, Baltic International Bank SE and AS LPB Bank). Overall, instant payments are available to 90% of Latvia's population.

Throughout the year, the volume and value of instant payments processed via the instant payment service increased 1.6 and 2.5 times respectively (18.4 million instant payments totalling 6.3 billion euro were processed), with up to 100 thousand instant payments being processed on certain days. The availability of the instant payment service was higher than 99.9%.

With a view to improving the interbank settlement of executed instant payments, Latvijas Banka carried out the transfer of settlements to the TIPS platform in 2021.

The Proxy Registry "Instant Links" and the instant payment request service

Latvijas Banka ensured the operation of the Proxy Registry "Instant Links", enabling the customers of the largest credit institutions in Latvia and Estonia to make instant and other payments in an even more convenient and faster manner, just indicating the payee's mobile phone number in the payment order.

At the end of 2021, the number of instant links registered with the Proxy Register "Instant Links" (whose degree of availability exceeded 99.9%) was almost twice as many as a year ago, while the number of requests increased almost 10 times (609 thousand instant links and 33.1 million requests).

Chart 1
Dynamics of the number of instant links in 2021 (thousands)

In October 2021, Latvijas Banka completed the development of another innovative interbank infrastructure – the instant payment request service – which is available to payment market participants for testing. The instant payment request service enables an instant sending of a payment request to the payer who has just to confirm the request for the initiator of the instant request to receive the requested amount. This is already the third instant solution by which Latvijas Banka continues to lay the foundation from which the Latvian payment market participants would generate new innovative payment solutions for the public. Instant payment requests will increase the efficiency of the payment process, reduce the potential for errors and speed up the payment of bills in Latvia.

Promoting innovation in payments

Latvijas Banka provided support for the further development of modern payment services in Latvia as part of the Financial Sector Development Plan for 2021–2023 by participating in the shaping of an ecosystem that supports innovation and by facilitating access of the market participants to innovative infrastructures, including those of Latvijas Banka.

Digital euro project

To promote the development of innovative payment instruments of the central banks, Latvijas Banka together with other members of the Eurosystem started to explore the technological feasibility of the introduction of the digital euro, as well as its impact on the application of monetary policy and the financial system as a whole.

Within the framework of the Eurosystem, Latvijas Banka participated in the digital euro experiment programme. Latvijas Banka developed the front-end solution for digital euro payments at points of sale. The joint experiment programme enabled the Eurosystem to check the technological feasibility and needs of the digital euro infrastructure, as well as to test the potential structure and functionality of the digital euro.

Public education

Experts of Latvijas Banka participated in several conferences and professional discussions, including by providing information on instant payments, cryptoassets, central bank digital currencies and the launch of the investigation phase of the digital euro project to mass media.

Analytical articles about the impact of tokenisation on payments, the payment development trends, the topical issues and the innovations in the field of payments were published in 2021.