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Real-time payment infrastructures advance in Europe

The march of real-time payments capabilities has continued apace this week, with both Iceland and Luxembourg gaining enhancements to payments infrastructure.

A new RTGS for Iceland

Firstly, the Central Bank of Iceland (CBI) and SIA, a European hi-tech company in payment services and infrastructures, controlled by CDP Equity, have gone live with a new real-time gross settlement system (RTGS) and instant payment platform.

CBI can now rely on a more strategic and modern infrastructure for its high and low-value payment systems, also enabling closer cooperation with other central banks, through SIA’s technology.

The CBI manages all interbank payments in the country, currently processing a daily volume of transactions of up to 1 million payments, with peaks of 160,000 per hour, despite a population of just over 365,000 inhabitants. The new system has been developed in order to manage up to 5 million payments per day and each transaction is on average processed in less than 40 milliseconds.

CBI implemented an innovative single platform developed by SIA that processes all types of payments (bank to bank, P2P, P2B and B2B), which should result in a consolidated operating model and in a higher level of efficiency in the whole country.

“An efficient and secure payment system is one of the prerequisites for smooth, normal business transactions in a modern economy," said Sturla Pálsson, director for Markets Department of the Central Bank of Iceland. "We need to use the best available tools at all times, and we are delighted with the implementation of the new interbank payment system from SIA.”

RT1 expands in Luxembourg

Over in mainland Europe, EBA Clearing has announced that its RT1 platform has considerably expanded its reach in Luxembourg. Five new joiners connected to RT1 today, including two participants from Luxembourg: Banque et Caisse d’Epargne de l’Etat, Luxembourg and Banque Internationale à Luxembourg.

With these additional joiners, RT1 has established critical mass for instant payments in Luxembourg in terms of payment accounts covered. This latest development has also further contributed to the build-up of pan-European instant payment reach: critical mass has now been reached in 10 countries across the continent, including Austria, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg and Spain.

RT1 currently counts 74 participants across Europe, which extend reach to 2,570 addressable payment service providers (PSPs) from 24 different SEPA countries listed in the routing table of the system. Together, these PSPs account for over 75% of the regular SEPA credit transfers EBA Clearing processes today. The RT1 system presently handles over 1 million transactions per day on weekdays.

“Thanks to the collaboration with EBA CLEARING through the participation in RT1, we can ensure continuous availability, rapidity and pan-European reachability for our customers’ euro payments,” said Serge Wagener, vice president, Payments, Banque et Caisse d’Epargne de l’Etat (Spuerkeess).

“We are very pleased that PSPs across Europe can now reach a critical mass of payment accounts in Luxembourg via RT1," commented said Hays Littlejohn, CEO of EBA Clearing. "We will continue to work with market players all across Europe to further increase pan-European reach for instant payments. In 2021, we will further expand the functionalities of the TIPS Instructing Party Functionality in RT1 to ensure that our participants can meet the new TIPS obligations in a very efficient and cost-effective way: they will be able to use RT1 as a single place to view their transaction flows and to reconcile as well as manage their positions.” 

RT1 provides payment service providers in the SEPA region with a real-time payment processing facility operating around the clock on any day of the year for payments in line with the SEPA Instant Credit Transfer (SCT Inst) Scheme of the European Payments Council. Payments in RT1 are settled in real-time with immediate finality.

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