Moving towards instant payments in Finland
The development of account-based instant payment in Finland in a manner that is compatible with European systems will bring greater competition and resilience to retail payments and will offer a new payment method under uniform terms and principles. It will also put in place European retail payment strategies which Finland is committed to.
Instant payment refers to a credit transfer that can be made in real time and around the clock every day of the year. It is a retail payment method that is always available in which, within seconds, the payment is debited from the payer at the payer’s bank and credited to the payee at the payee’s bank, and at the same time the assets transferred are available for use by the payee.
In Finland, the development of solutions based on instant payment has progressed very slowly. Although there are payment methods in Finland which are in real time from the payer’s perspective, there is no widely recognised instant payment solution that works equally for customers of all banks and on the same terms.
Both the Eurosystem and the European Commission strongly support the growth of instant payment and the creation of a common European payment method for points of sale that is based on instant payment and recognised throughout Europe. Instant payments are expected to provide a variety of significant benefits for consumers, businesses, public administration and payment service providers.
Support for instant payment forms part of the retail payment strategies of the European System of Central Banks and the European Commission.
The Bank of Finland is coordinating the creation of a Finnish instant payment solution – launched by the Payments Council – that will be compatible with European standards. The aim of the instant payment project was to create a concept for a Finnish instant payment solution that includes a rule book, a governance model, and, as part of the rule book, a model of the user register required, plus a communications plan.
A Finnish instant payment solution would bring more competition to the market and thereby contribute to resilience, which is essential. The necessary steps before an instant payment solution can be established include first defining the details of the payment concept itself and then, external to the project, creating solutions that are based on the concept.