From today, electronically submitted credit transfers will reach their destination within a maximum of four hours, instead of the earlier transfer time of one business day. Owing to the nearly two-year development project, bank customers (households and companies) are offered a major advantage.
As of this day, electronically submitted domestic forint transfers will take a maximum of four hours, instead of the earlier one business day. The four-hour rule indicates the maximum time for performing credit transfers, as the system operated by GIRO Ltd. settles items submitted to it by banks every two hours. Consequently, in the vast majority of cases, credit transfers are expected to be settled within a shorter period of time.
As a result of the largest development project implemented in domestic payments in the past 15 years, there is enough time to transfer the amount on the due date, enabling customers (private individuals and companies) to gain one day’s account interest. Money received during the day can be used to make other intraday payments and make urgent transfers.
As an additional advantage for companies that using new SEPA standards they can automate their analytical accounting system which makes financial administration more efficient. In addition, they can reduce their account balance, possibly moving funds to instruments bearing higher interest.
‘The successful launch of intraday credit transfers is a milestone in Hungarian payments’ said András Simor, Governor of the Magyar Nemzeti Bank at today’s press conference. The Governor added that the implementation of the newly operating system was launched upon the initiative of the Magyar Nemzeti Bank serving the public good and is supported by the Bank’s relevant decree.
Regulation was necessary because the development of the payment infrastructure is a complex task. This is a nationwide network market, where competing participants need to cooperate in the course of development, where neither party gains a competitive advantage in the end, as the new, more favourable service will be equally accessible to all.
Mihály Patai, Chairman of the Hungarian Banking Association, said that the development projects implemented in the past two years posed major challenges for domestic payment service providers, who invested substantial financial resources for the establishment of a more modern payment system that better meets customer needs. He added that multiple intraday settlements contribute to significant changes in bank liquidity management. The applied SEPA standard expands data content, serves customer needs in the corporate sector more effectively, and it basically functions as an investment brought forward which will not be necessary to make upon introduction of the euro.
Péter Legeza, Chairman-CEO of GIRO Ltd, emphasised that the switch to five daytime intraday settlements, in addition to night-time operation brought about a major change in the activity of Giro Ltd, too. The two-hour cycles demand disciplined behaviour from clearing members and Giro Ltd as well. To manage moderately higher operating risks compared to night-time operation, where reserve times are available, the system is also designed to run two parallel systems that process transactions, and in the event of a problem, it is possible to switch from one system to another at any time.
Tests have been running since August last year and the result of the first three cycles suggests that GIRO and clearing members have successfully prepared for operating intraday credit transfers.
More information on intraday credit transfers can be accessed by using the link below:
MAGYAR NEMZETI BANK