Cecilia Skingsley: We need to update and modernise our payment services
“The Riksbank has a long tradition of providing Sweden with a modern, cost-effective and secure payment infrastructure, and this is now undergoing its largest overhaul in generations. We will soon be launching RIX-INST for instant payments and we have also taken a decision that the preferred direction going forward is to use the Eurosystem’s platforms for settlement of payments and for securities settlement, T2 and TARGET2-Securities (T2S), respectively, for payments in Swedish kronor. These were the words of first Deputy Governor Cecilia Skingsley at a webinar organised by Swedbank today.
Date: 06/10/2021 08:00
Speaker: First Deputy Governor Cecilia Skingsley
Rapid development in the payment market
Technological development creates new ways of paying. This means that the Riksbank’s infrastructure, which enables safe and efficient payments, needs to be updated and modernised. Internationalisation, which means that banks and other agents are active in several markets, also increases the requirements for harmonising and using common standards. “In addition, the development in general is placing increasing demands on security, particularly in the area of cyber security, which will require significant resources,” Cecilia Skingsley noted.
The Riksbank will shortly be launching a direct payment service, RIX-INST, based on the European Central Bank’s TIPS Platform (Target Instant Payment Settlement). With this service, banks will be able to settle payments immediately in central bank money, 24 hours a day, all year round. Furthermore, the Riksbank has recently decided that the preferred direction going forward is to use the Eurosystem’s platforms for settlement of payments and for securities settlement, T2 and TARGET2-Securities (T2S), respectively, for payments in Swedish kronor. “Joining T2 and T2S will benefit participants in the Riksbank’s current settlement services, but in the long run it should also reduce costs for the public. My message to the Swedish banks is that this is no small task and that preparations will take years, so it is important that they plan for T2 and T2S in their operations,” Cecilia Skingsley said.
In addition, the Riksbank is heavily involved in international efforts to improve cross-border payments, which for individuals are still slow, expensive and not particularly transparent. The G20 countries have developed a comprehensive program aimed at making such payments smoother.
An e-krona for payments in the future?
The Riksbank’s investigation into the possibility of introducing an e-krona in Sweden is also part of future payments. Cash use in society is decreasing and in its role as issuer of Swedish kronor, the Riksbank therefore needs to modernise its product. “The issuance of an e-krona can be seen as the Riksbank fulfilling its obligation to supply banknotes and coins with new technology and as the state maintaining its role in the payment and monetary system,” Cecilia Skingsley said.