The turnover of electronic payment instruments increased in 2014 in line with the trends of previous years, and the payment account and payment card coverage of households remained stable despite a moderate decline in the number of payment accounts. The indicators measuring the level of development of payments continued their slow convergence to the European Union averages. The increasingly widespread use of contactless technology may support further the electronisation of retail payments over the short term. Developments affecting postal bill payments, in particular, the payment solutions of the Hungarian Post Office allowing customers to pay via mobile phone or bill payment machines, as well as creating the possibility of card payments at post offices all facilitate the electronisation of bill payments.
Although electronic payment services remain extremely safe, market participants need to put forth continuous effort to prevent fraud. In view of the increasing prominence of online payments, the MNB considers the safety of such payments to be of key importance. With that in mind, it has commenced the transposition of the relevant international guidelines, and will assess the compliance of payment service providers. Moreover, in order to ensure a more accurate mapping of the operational risks of payment services, the MNB monitors the malfunctions affecting payment services.
The fees of payment services have stabilised at higher levels than seen in previous years. The prices of certain services reflect value-proportional pricing to a higher degree than reasonable, and this method of price-setting represents a significant share in market participants’ revenues from payment services. Pointing to the existence of cross-pricing, this practice may raise the charges of payment transactions excessively in the case of high-value credit transfers.
The reduction of interchange fees in 2014 and the favourable changes in the financial transaction tax on card payments from 2015 enable a stronger incentive for the use of payment cards. The MNB firmly expects merchants to use some of their savings from the interchange fee reduction to encourage a more intensive use of bank cards to ensure that this sector is also actively involved in the modernisation of Hungarian payment transactions. With the participation of GIRO Zrt, the MNB implements even in the short term significant developments in the clearing infrastructure of credit transfers which are expected to accelerate further the execution of payments. From the autumn of 2015, credit transfers will be cleared every hour between 7:30 am and 5 pm on working days, ensuring more favourable conditions in the future for both retail and corporate customers using this payment method.
Payment and securities transactions were executed efficiently and safely in the overseen systems in 2014 as well. The extension of the Funding for Growth Scheme and the phasing out of the MNB’s two-week bill from the range of eligible collateral prompted participants to purchase a substantial amount of government securities and to pursue improved liquidity management in order to ensure the liquidity required for the execution of payments. Thanks to the adjustment of the participants, clearing and settlement risk did not increase considerably. In the course of 2014 the new international principles for financial market infrastructures were incorporated into the Hungarian risk-based oversight practice. As a result, the oversight of the Hungarian systems will be based on standardised and expanded expectations and methodology in the future.
Following the integration of supervisory functions, the provisions of the Act on payments services widened the scope of the payment inspections performed in 2014, providing an opportunity for more complex payment service inspections. The MNB attaches great importance to exploring problems affecting a broad range of consumers, such as the failure to provide required information or charges imposed on customers for services that should be provided free of charge. The fines imposed rose markedly compared to the previous period with a parallel increase in the measures prescribed, boosting compliance and consumers’ confidence in payment services.The roll-out of the CLS system to cover the settlement of HUF/FX transactions commenced in the autumn of 2014; consequently, the elimination of foreign exchange settlement risks between the forint and other CLS currencies will be possible by the end of 2015. The elimination of these risks bolsters financial stability especially in financial crisis situations. On 4 July 2014, KELER CCP gained the license prescribed by EMIR, bringing its operations in line with the requirements of the European Union. The risk management framework of KELER CCP measured up to the required standards and prevented the emergence of mass default in the capital market upon the suspension of a number of brokerage firms in the first half of 2015.