This pan-European solution is connected to the instant payments infrastructure introduced by Latvijas Banka in August, it said.
It means that instant payments are now available between the customers of JSC Citadele banka and the customers of the European banks that have joined the RT1 system (these include ABN AMRO, Bankia, Erste, Intesa Sanpaolo, Raiffeisen, SEB, and Unicredit banking groups).
"This is a big step forward in introducing instant payments throughout Europe. It is an important innovation, as previously transfers of money between different euro area countries took a relatively long period of time. Moreover, it was impossible to make a transfer on weekends and holidays. As of now, a transfer, for example, between Germany and Latvia will happen in a matter of seconds", said Harijs Ozols of Latvijas Banka.
Two major Latvian commercial banks, JSC Citadele banka and JSC SEB banka, are currently connected to the RT1 system.
Kaspars Cikmačs, a member of the board of JSC Citadele banka said: "As of 21 November, the customers of Citadele banka will be able to make instant payments to many European banks and to SEB banka accounts in Latvia. The initial limit for an instant payment is set at EUR 30. This limit will be gradually raised to reach EUR 15 000 which is the maximum limit for instant payments."
The fee applied to instant payments will be the same as the one applied to regular payments, he added.
Arnis Škapars, member of the board of JSC SEB banka said: "About 60% of the payments made by SEB banka customers are intrabank payments and these are completed immediately. According to our estimates, over 98% of payments will be completed immediately once Latvia's major banks have connected to the instant payments system. We are also running parallel tests on making instant payments: this service will be available to our customers as of the beginning of December. Initially, the customers of SEB banka will be able to make instant payments via the internet bank and the mobile application, but the service will be also available through other electronic channels soon thereafter."
JSC Swedbank, the largest Latvian commercial bank in terms of the value and volume of customer payments, also intends to offer this service as of the beginning of 2018, following the completion of infrastructure and functionality tests.
Instant payments are funds transfers provided 24 hours a day, including holidays and weekends. Customer payments are executed within a few seconds and the money received can be reused immediately. This is a significant change as previously payments between European banks were only available on business days and a transfer took several hours.