Published: 30.04.2020

Several major Estonian commercial banks – Swedbank AS, SEB Pank, Coop Pank AS and AS LHV Pank (as of May) – have joined the Proxy Registry "Instant Links" developed and maintained by Latvijas Banka (hereinafter, the Proxy Registry).

The Estonian Banking Association published the news this week (see the press release:

Now customers of Estonian commercial banks can also make instant payments between commercial banks using proxies, i.e. a possibility to make a transfer by indicating the mobile phone number of the payee only. Latvijas Banka, in its turn, has an opportunity to provide this innovative financial service on the Baltic scale, thus strengthening its position as the regional leader in innovative payments.

Harijs Ozols, Latvijas Banka's Innovative Payment Services Manager, says: "It is positive that Estonia's financial market and major commercial banks are joining the Proxy Registry "Instant Links" developed and maintained by Latvijas Banka. This will also provide users of commercial bank services – households and businesses – in Estonia an opportunity to make secure, rapid and convenient interbank payments indicating the payee's mobile phone number only. Thus, such innovative payments are becoming the new standard in the Baltics, just like it is the case with instant payments in general for quite some time already. Moreover, financial services providers have an opportunity to develop innovative payment services based on the above solutions.

The Baltic States have been the pioneers in introducing modern financial services in the euro area, and we intend to continue our work. Innovative financial market infrastructure is an advantage improving competitiveness of our businesses and consequently strengthens economy in Latvia and Estonia.

This is already the second positive news on Proxy Registry development this week: Swedbank AS has also started to provide the above Latvijas Banka service to its customers. Consequently, now it is possible to make instant payments between the customers of AS Citadele banka, AS SEB banka and Swedbank AS as well as the four above mentioned Estonian commercial banks without using the payee's current account number. The process is simplified, and only the payee's mobile phone number has to be indicated. This will also enable the use of other identifiers (e.g. e-mail addresses) for such transfers in the near future.

Latvijas Banka has developed the Instant Payment Laboratory ZibLab++, an innovative cooperation platform, to help market participants to jointly address practical and technological issues, creating products and services that are based on instant payments and using proxies and offer such innovative products to their customers. The work of this laboratory will help the public at large, financial institutions and other stakeholders to follow the development of possibilities of instant payments, proxy service and instant payment request service, as well as other payment innovations based on the above opportunities and developments. 

Introduction of instant payment requests at interbank level has been planned to be the next stage of the development of innovative payments services provided by Latvijas Banka.

An instant payment request means the following: the entity requesting payment would fill in all transfer details, and the payer would only have to approve payment in its internet bank or mobile application, if all payment details are acceptable, regardless of the fact whether both parties to the transaction use the services of the same credit institution or not. The instant payment request service, combined with the Proxy Registry, would provide an opportunity to request payment based on the payer's mobile phone number only.

The instant payment request service would offer more user-friendly solutions both in the person-to-person (P2P) segment and for business invoice settlement, as well as allow further development of new payment solutions based on the service.

Currently, Latvijas Banka is developing this solution together with commercial banks.