The RIX payment system

All payments that are not made with banknotes and coins involve moving money between accounts at one or more banks. For example, when households and businesses pay a bill, they instruct the bank to transfer money from their own account to the payee’s account. If the payer and the payee have accounts with the same bank, the payment is finalised within the bank. If the payee’s account is in another bank, a centralised payment system is needed to forward payments from one bank to the other. All payments, both directly between banks and on behalf of a customer, are made through the accounts the banks have in RIX. The Riksbank thus functions as the banks’ bank and is the hub of the payment system. As a central bank, the Riksbank can inject money into RIX by lending money to the banks during the day, allowing payments to function smoothly.

Settlement of participants’ accounts in RIX-RTGS and RIX-INST takes place in the Riksbank’s money, i.e. in central bank money. Central bank money is the safest way for banks and other financial institutions to make payments between each other as the Swedish state guarantees the value of the money.

RIX-RTGS

RIX-RTGS is designed to handle large payments between participants. Around SEK 550 billion is traded daily in RIX-RTGS and the average value of a payment sent is around SEK 20 million.

A payment in RIX-RTGS goes through several stages: it is checked, cleared in some cases and settled. The checks ensure that the payer is authorised to make the payment and that there are sufficient funds in the payer’s account. Clearing means that payers’ payments are reconciled before they are passed on for settlement. The settlement of participants’ accounts in RIX-RTGS is the last step in the payment chain and means that the payment is finalised.

How does settlement in RIX-RTGS work?

Transfers between participants’ accounts in RIX-RTGS are made electronically and according to the principle of real-time gross settlement (RTGS). This means that the transfers are made one by one, and that the money coming into the accounts is immediately available for other transfers.

There are also functions in RIX-RTGS that make it possible to make several transfers simultaneously by offsetting them against each other. This increases efficiency in the system. Thus, RIX-RTGS is a hybrid system that utilises both the advantages of gross settlement - the reduction of risks - and the liquidity savings from offsetting transfers. To promote safety and efficiency in the system, the Riksbank can provide credit during the day, what is known as overnight credit, in RIX-RTGS. However, credit is only granted against adequate collateral.

Detailed documentation for RIX-RTGS ca be found on the page “Instructions and system documentation RIX-RTGS”

RIX-INST

RIX-INST is the Riksbank’s system for instant payments. Unlike RIX-RTGS, RIX-INST is open around the clock every day of the year and settlement in RIX-INST is instant. Today, payments from the Swish mobile application are settled on RIX-INST.

How does settlement in RIX-INST work?

There are two different models for settlement of payments in RIX-INST: “Standard Settlement Model (standard model)” and “Single Instructing Party Settlement Model (SIP model)”.

Standard model

When using the standard model, the amount is reserved on the payer’s account in RIX-INST, and then a payment request is sent to the payee. The reserved amount is locked and cannot be used for other payments. If the payee accepts the payment, the reserved amount is released and the transaction is carried out immediately. Both the payer and the payee then receive a confirmation that the transaction has been completed. As of November 2024, all RIX-INST participants are obliged to accept payments according to the standard model, and also comply with the NCT Inst framework developed by the Nordic Payments Council.

SIP model

The SIP model, which the Swish mobile application uses for the settlement of payments, works slightly differently. Here, no reservation of the amount is made and the payee does not need to authorise the payment; the transaction is carried out immediately after the payment instruction has been approved by RIX-INST. Both the payer and the payee receive confirmation of the transaction through an agent that the participants have agreed to use. To be authorised, an agent must apply to the Riksbank. The Riksbank must approve the agent and give it the correct authorisations. For Swish payments, the company behind Swish, Getswish AB, is the agent.

Detailed documentation for RIX-INST ca be found on the page “Instructions and system documentation RIX-INST”

Comparison of the two settlement services

RIX-RTGS and RIX-INST are two different services and thus have several differences as described above, but also some similarities. An overview in tabular form of the similarities and differences between the two services can be found in the document “The Riksbank’s settlement services”.