Instant payments project

The Instant payments have the role to change the game in an industry which, since the emergence of cards approx. 60 years ago, technology has played an increasingly important role. The two essential attributes of instant payments are represented by the possibility of the end users (individuals of companies) to make payments and receive money ANYTIME (24/7/365) and the IMMEDIATE ACCESS of the beneficiary to its received funds (in a matter of seconds).

The context behind the launch of TRANSFOND’s Instant Payments service was a complex one: on the one hand, the European and global payments industry accelerates towards the Instant payments standard (including both banks and traditional PSPs, and the FinTechs), on the other hand, the local payments market is the last in the category of electronic payments per capita, compared with the rest of the European Union, , which indicates a major deficit of education and financial practice, both at the level of individual consumers as well as the institutional payments services users.

This existing gap between the degree of electronic payments usage in Romania and the European countries may be alleviated, including to the adoption of instant payments as cash payments alternative.

Aligned since the begining to the general trends described, TRANSFOND’S development strategy aims to substitute SEPA payment orders currently in place with instant payment orders, in the future, once agreed with the local banking sector.

Throughout the project, TRANSFOND has successfully collaborated with the National Bank of Romania – which endorsed the Automated Clearing House Rules including Instant Payments, as well as with the Romanian Banking Association – Administrator of the National Payments Schemes within which the dedicated groups of Instant Payments were working. 

TRANSFOND developed and completed the technical application (October 2017), conducted the internal testing (November 2017 – February 2018), coordinated the testing with the banks (February 2018 – opening of the test medium for banks) and the commissioning of the service took place in the second semester of 2018, with the successful conclusion of the tests conducted by the banks.

The complexity of operating a real time, 24/7 system derives from the simultaneous operation both of a service with a schedule consisting in 3 daily clearing sessions, organised in the so-called ”business hours”, from Monday to Friday, as well as this new service which processes payments on an uninterrupted schedule. After a period, which will locally be established together with all the payments services providers and with the central bank, the service which has the capacity to perform instant payments anytime will remain the only one to operate retail payments, since this level of speed/performance will become the new standard, and the ability to fully replace the cash as a way of payment will be perceived by all involved. We underline that the full replacement of cash payments is given by the ability of Instant payments to ensure instant transfer of funds from the payer to the recipient, between their accounts opened with payments services providers entitled thereto (either banks, fintechs or other legally known categories and certified to provide payment services).