The Czech central bank and leading retail banks have agreed to introduce almost immediate inter-bank payments by the end of 2018. While many of the technical questions have already been broached a testing period to make sure everything works is needed.
One day, perhaps two or more. That’s often the standard for cash transfers between different branches of the same or different Czech banks at the moment. But the Czech National Bank is now piloting changes that could result in cash transfers in seconds rather than days.
Such payments should be possible 24 hours a day and every day of the year. The ceiling for such individual transactions has been set at 400,000 crowns. The benefit for those being paid is that their accounts will be credited almost immediately and sums will not be hanging around on the banks’ accounts or somewhere in transition.
General agreement on the framework for immediate cash payments were thrashed out between the Czech Banking Association and the central bank before Christmas. They reckon payments in seconds between participating banks could be ready by the end of 2018.
While many of the technical questions surrounding such payments have already been solved, there are still many more to be face. These in particular focus on the stability of the payments system overall and that’s one reason why a test period of expected to last from around the middle of 2018 to the final start of operations has been earmarked.
During the first half of 2018, individual Czech banks, with the Czech National Bank playing a coordinating and oversight role, will put in place the systems that should pave the way for more or less immediate payments.
One question still to be addressed is whether and how other banks operating in the Czech Republic, those essentially offering general banking services to the public, can also be brought on board.
Another issue is what extra payment banks might be able to demand for this service. The central bank should give its verdict on that in the future.
A survey by the STEM/Mark polling and research agency found that around half of Czechs would use the virtually immediate payments system. That response though was based on the assumption from a ratio of eight out of 10 taking part in the survey that the extra costs would be between 10 and 20 crowns, Higher payments would be a turn off.
Around 2.7 billion crowns worth of inter-bank transactions are on average dealt with daily by the Czech National Bank with the total average number of transactions coming to around 2.5 million a day.