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The Bank of Estonia is about to close its present interbank retail payments system at the end of January 2014, which probably will result in slower movement of clients' payments between banks.
Bank of Estonia to shut down interbank retail payments system in January
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It will mean that in order for a payment to reach another bank the same day it has to be initiated earlier than the present deadline of 5 p.m., the central bank said.
«Commercal banks have decided to use more favorable solutions for interbank retail payments starting next year than was offered by the central bank,» Bank of Estonia Vice President Madis Muller said.
«The positive aspect in this decision is that for the major banks the saving on payment fees will create better opportunities for offering the service to clients cheaper than so far,» Muller said.
Commercial banks now must decide which payments system meeting the SEPA standard they will start using in February, as clients must be provided with the possibility to make payments consistent with the SEPA standard.
«On the other hand, commercial banks should look for solutions how to restore the speed of retail payments for Estonian businesses and residents in the future. When demand arises among clients for faster payments on the market, the commercial banks will hopefully respond,» Muller said.
He added that international service providers are about to bring faster settlement possibilities to the market in the near future.
Banks cannot continue to use the current retail payments system, ESTA, as in its current form it is not consistent with the forthcoming single EU retail payment standard SEPA. The Single European Payment Area (SEPA) technical and business requirements will apply in the European Union from February 2014 so that private clients and companies will be able to use one bank account and one payment card to make payments in euros across the whole of Europe.
The Estonian central bank at the beginning of this year offered commercial banks a new retail payments system consistent with SEPA requirements that would have preserved the present frequency of interbank payments at ten times a day. The offer was canceled after commercial banks showed no interest in it.