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Instant payments in Central and Eastern Europe

06/12/2018

As part of InstaPay’s thought leadership in the world of instant payments our latest webinar Instant Payments in Central and Eastern Europe: Challenges, Considerations and use cases, sponsored by Nets, investigated the implementation of instant payments in the region and how important it is to take stock of the differing considerations for the pan-European payments dream. Central and Eastern Europe is a hub of activity in the payments space, with over 600 fintech companies calling the region home, and over 50% of these working in the transaction and payments or financing sectors. The Financial Times remarked in 2017, ‘nowhere in the world have expectations for growth changed so rapidly and positively as in Central and Eastern Europe’; so-called millennials and Generation Z make up nearly 50% of the population, ensuring the region is well-placed to accelerate digitalisation.

The impact of SCT Inst

With the introduction of SCT Inst a year ago, the industry has also seen several domestic systems in Central and Eastern Europe developing. The region and Europe more generally has witnessed mandated as well as industry-led programs emerging.  The first speaker to present, Lajos Bartha, Executive Director at The Central Bank of Hungary began by giving a description of the upcoming instant payments system in Hungary, due to go live in July 2019. Speaking on Hungary’s decision to mandate instant payments Bartha noted that this was ‘for a variety of reasons’ but that ‘initiatives to develop infrastructure rarely come from the market’. However, he went on, ‘instant payments can indeed support competition from an infrastructure point of view’.

Speaking next was Grzegorz Leńkowski, Director of the Instant Payments Unit at KIR (the national clearing house in Poland). Poland has had instant payments for over six years and as such is the only well-established instant payments system in the region. Grzegorz outlined Polish experience since the systems launch and described how the Polish system is still on a journey from being considered as a premium product to a standard payment tool’.  Whilst ‘the product is considered commercialized and a must-have for the banks’, Grzegorz noted that ‘the price for the end customer will be a main driver of volume’.

Approaches to implementation

 The webinar observed that whilst the Central and Eastern Europe region may not have use cases dissimilar to the rest of Europe, there may be differences in how many countries in the region approach implementation. Paul Francis Walvik-Joynt, Senior Vice President of Payments at Nets noted Central and Eastern Europe is utilising ‘fast and efficient deployment programs’. Nets are providing the instant payments central infrastructure to both Slovenia and Hungary. Whilst other countries focus on areas such as fraud, liquidity and system integration when implementing instant payments, Central and Eastern European markets do more and are thinking much more strongly about ‘flexible solutions, interoperability and value added services’.

It was clear from audience engagement in the Q&A that there are questions about readiness as a whole across the region but with Czech Republic due to go live imminently and further discussions taking place in Romania and other markets, the future looks bright.

You can listen to the webinar here.

Author: Saara Day