Published: 07.04.2022

Harijs Ozols, Head of the Information Technology Department and ZibLab++, Latvijas Banka

This summer will mark five years since Latvia pioneered the introduction of instant payments in the euro area through the instant payment service developed by Latvijas Banka. They are interbank payments that are based on uniform euro area standards and executed within a matter of seconds 24/7/365 also at weekends and on public holidays. I remember that in those days we were concerned about whether the Latvian financial sector and customers would be interested and ready to adopt new technologies in the traditionally conservative banking sector and, more generally, how all this will function in practice. Expectations have been more than fully met, and today various innovations (not only instant payments and the products of the infrastructure maintained by Latvijas Banka) are the new normal (the new standard) in the payment area of Latvia.

The number of instant payments and their share in the total volume of payments continue to follow a dynamic upward trend. In 2021, the volume and value of instant payments processed via the instant payment service increased 1.6 and 2.5 times respectively (the volume and value of the processed instant payments were 18.4 million and 6.3 billion euro respectively), with up to 100 thousand instant payments processed on certain days.

Until the end of 2021, the volume and value of instant payments made in the instant payment service totalled 38.77 million and 10.38 billion euro respectively.

The share of instant payments made between Latvian credit institutions via the payment systems maintained by Latvijas Banka increased to 26.11% in the second half of 2021 (22.41% in the first half of 2021).

In late 2021, the Proxy Registry "Instant Links" contained 609 thousand instant links, and 20.57 million requests for more user-friendly initiation of payments were made in the second half of 2021, reaching more than 150 thousand requests on certain days (compared with 484 thousand instant links registered at the end of the first half of 2021 and 12.53 million requests made in the first half of 2021). 

Particularly noteworthy is the successful joining of the Treasury (as of late January 2022) to the instant payment infrastructure provided by Latvijas Banka. The public sector is also receptive to innovations and cares about public comfort.

As regards the future plans, Latvijas Banka has completed the development of the instant payment request service, which is now available to commercial banks and other providers of such payment services for testing and offering to their customers. Initially, instant payment requests might be used for making more user-friendly payments between customers of different banks, but overall instant payment requests should be used in virtually any field, particularly when making more user-friendly and safer (also faster) e-bill payments, likewise in e-commerce and other areas. 

The instant payment request service is the third element of the comprehensive and modern payment solution set (together with instant payments and instant links) provided by Latvijas Banka.

Innovative payment solutions are increasingly entering everyone's life, making it more comfortable. What matters is that they also help businesses develop new products and services.