Instant payments are non-cash 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.
Latvijas Banka has developed a system enabling payment service providers to provide instant payment services to their customers: an opportunity to transfer money from an account in one payment service provider to an account in another payment service provider within a matter of seconds on any day and at any time of the day.
As of 28 August 2017, Latvijas Banka provides an opportunity enabling instant payments between banks, i.e. between the customers of those banks. Bank customers will be able to make instant payments in the same way as they currently make regular payments: by submitting a payment order via their internet bank, mobile bank, mobile application, e-purse as well as by using other solutions offered by banks and their cooperation partners.
For now instant payments are available for customers of Citadele banka, AS SEB banka and AS Swedbank, but the objective of the project is to make instant payments available to all individuals and businesses in Latvia.
An instant payment is completed within a matter of seconds, with the payer and payee receiving an online confirmation that the money has been credited to the payee's account, and the money received can be reused immediately.
Latvijas Banka ensures instant payments 24/7, regardless of weekends or holidays. The same requirement also applies to banks when they provide instant payments service to their customers.
Instant payments are also project of the euro area. European credit institutions can join the Instant Payment Scheme, thereby ensuring their customers pan-European reachability of instant payments.
The maximum limit per payment at the system level is 100 thousand euro, yet banks can set lower limits on payments made by their customers.
In cases requiring that an invoice is paid in order to receive goods, instant payments will ensure that the trader receives the payment immediately at the moment when the goods are received, thereby making the goods or services available to the buyer sooner. Instant payments will also be an alternative for paying cash upon delivery of goods. The popularity of instant payments is largely dependent on the banks' ability to develop such solutions and the merchants' willingness to use them when accepting payments from consumers.
Actually, instant payments can be used in any area and they can be expected to largely replace traditional payments in the future. The most typical examples would be:
Speaking in the language of modern technologies, instant payments are WhatsApp for money .
For the payer, it is immediate non-cash transfers available on a pan-European scale 24 hours a day regardless of holidays and weekends. For the payee and merchants and individuals in particular, it is the possibility to receive payment quicker and re-use the money immediately. Instant payments also offer higher security to both payee and payer by reducing the need to use cash when purchasing goods or services and making payments between individuals. For the country, it is more efficient cash cycle processes and better integration into the European payments area.