Published: 19.04.2023

Payment systems constitute a standardised agreement – common rules and procedures for system participants allowing people, businesses and financial institutions to carry out mutual digital money transfers.

Secure and efficient payment systems are a precondition for the functioning of the economy. They ensure the following opportunities:

  • for the public – to make non-cash payments;
  • for financial market infrastructure participants – to execute mutual settlements;
  • for the central bank – to implement monetary policy.

At the same time, cash remains an important means of payment used daily in the countries that have adopted the euro. A system providing businesses and the public with cash is thus equally important to ensure that banknotes and coins are available to anyone who finds them more convenient for making payments or savings. Latvijas Banka will maintain an infrastructure for both cash and non-cash payments in a foreseeable future.

Latvijas Banka maintains and develops a payment system for customer payments and instant payments – EKS as well as acts as a system operator of TARGET-Latvija, Latvia's module for the interbank payment system for European Union banks (TARGET2) that performs interbank payments and monetary policy operations.

Non-cash settlement is becoming increasingly frequent in the euro area. This is driven by technological development together with the growing public demand for instant and secure payment solutions. Non-cash means of payment is an electronic bank's accounting record protected by law as tightly as cash.

Over the recent years, the euro area also experiences a transition to a new payment industry standard – instant payments. In 2017, Latvia was the first among the euro area countries to introduce instant payments, and Latvijas Banka is thus taking part in developing the field of payments. New, but secure financial services in euro have been suggested – the central bank supports innovation as well as promotes the development of payment instruments through instant payments, instant linksinstant payment requests and Instant payment laboratory.

Latvijas Banka also oversees payment and financial instrument settlement systems to assess their efficiency and security as well as provides an overview on trends in the use of cash and non-cash means of payment in Latvia and compiles and analyses payment statistics on all payments made in the country and interbank payments carried out via Latvijas Banka's systems.