Instant payments are increasingly in demand. This is illustrated not least by the popularity of Swish. It is also illustrated by a regulatory proposal from the European Commission. The proposal updates the so-called SEPA regulatory framework, which means, among other things, that payment service providers offering credit transfers in euros will also be obliged to offer instant payments in euros.

It is now important that new solutions or services for instant payments can be handled in the payment infrastructure and in the Riksbank’s system. This is one of the reasons why the Riksbank launched the new settlement service RIX-INST in May 2022. The plan is for instant payments such as Swish to be settled in the new service. Settlement can then be carried out in central bank money (see Swish payments will start to be settled in RIX-INST in 2023).

In RIX-INST, payments made by banks on behalf of a customer, usually small amounts that were previously aggregated and settled on a few occasions daily, can now be settled individually, one by one. The service will be open 24 hours a day, every day of the year. It will then be possible for banks to offer account-to-account payments that reach the recipient immediately. In the aggregation model, it could take a day or more for the recipient to receive the money in their account. The new settlement service is in place but not yet used by banks, which need to adapt their systems to take
advantage of it.

RIX-INST uses the TARGET Instant Payment Settlement (TIPS) platform of the Eurosystem. One advantage of sharing systems with other central banks is that costs can be shared. Another advantage is that payments to and from the euro area can be faster, smoother and cheaper when the Swedish krona and the euro are in the same technical system (see RIX-INST can facilitate instant payments between different currencies).

Common rules make payments more efficient

Digital payment systems involving different actors depend, among other things, on a regulatory framework. The framework can be compared to a common language that the participants in the system need to use in order to make payments safely and efficiently. For payments in the Nordic region, the Nordic Payment Council (NPC) has developed a common language in the form of standards and guidelines for payments in the Nordic region.

One advantage of the NPC framework is that it is based on international regulations and modern standards for instant payments, such as ISO 20022. This makes it easier to build solutions for cross border payments. It also makes it easier for banks to manage payment data, which makes it easier for them to carry out money laundering controls (see Payments moving to ISO 20022).

All banks participating in RIX-INST will be required to adhere to the NPC’s framework regarding instant payments from November 2024. This means that participants will be able to develop payment products based on the framework.