The Magyar Nemzeti Bank’s Executive Board has decided that GIRO Zrt, a company wholly owned by the Bank, will develop the central infrastructure for an instant payment system. With the completion of the project, a core payment system will be established by mid-2019. By joining the system, Hungarian payment service providers will be able to provide instant payment services to their customers. In addition, the new core infrastructure will support the introduction of innovative services and the entry of new service providers to the market. The project will enable GIRO Zrt to provide more enhanced services to domestic payment service providers, without a tangible increase in transaction fees.
Following a decision by the MNB’s Executive Board, the core infrastructure for domestic instant payments will be developed by GIRO Zrt, a company wholly owned by the MNB. The system should stand ready to process payment transactions instantly from the second half of 2019; and the increased level of service may not be associated with a tangible increase in transaction fees, either for payment service providers or for their customers. The concept for the implementation of the new system will meet the basic requirements set out by the MNB’s Financial Stability Board in December 2016.
The system will process credit transfers and other innovative payment solutions based on them within maximum 5 seconds on a 24/7/365 basis. A database managing secondary account identifiers will also be created, which will allow customers to initiate payments using email address, mobile phone number or tax identification number, without having to know the beneficiary’s multi-digit bank account number. The new core infrastructure will ensure all of these functions by relying on outstanding processing capacity and continuous availability.
The development will make it easier for new payment service providers and FinTech firms to enter the market. This in turn will encourage the development of innovative payment solutions by allowing all service providers to use the same state-of-the-art core system as a platform for their services. Household and corporate customers will be the major beneficiaries of the resulting increased competition, who will be able to use fast and efficient electronic payment solutions in addition to physical cash in practically any payment situation.
The new payment system will ensure instant and final settlement of payments for customers, making transferred funds immediately reusable. To this end, payment service providers will have to constantly ensure that they hold sufficient funds on the technical account of GIRO Zrt with the MNB at all times.
The MNB will publish details related to the operation of the core infrastructure on its website at https://www.mnb.hu/en/payments/instantpayments by the end of March 2017.