Payment and settlement systems in 2021: instant payments becoming more and more established

Banka Slovenije can report that, despite the risks related to the coronavirus pandemic, we were able to ensure that payment systems again functioned effectively, securely and smoothly last year. The trends from the previous years continued: 229.10 million transactions in the total amount of EUR 562.74 billion were settled via payment systems. One notable development was instant payments, whose use increased strongly last year, and which are increasingly establishing themselves as the new standard for payments.

Payment and settlement systems are infrastructure that facilitates the transfer of cash and securities in the economy. They also provide for the reliable flow of money between central banks, commercial banks, savings banks and other participants in the financial system. Ensuring their smooth functioning and operation is one of Banka Slovenije’s key tasks. Banka Slovenije conducts regular supervision of the operation of these systems and monitors their functioning, for the purpose of ensuring that they function effectively, securely and smoothly. In this context Banka Slovenije has drawn up a report on the functioning of payment and settlement systems in 2021.

Payment systems for SEPA payments and card transactions account for 99.49% of all transactions in total

Payment systems for SEPA payments (70.28% of the total) and for card transactions (29.21%) account for the largest shares of all transactions. Both are for the settlement of retail payments, for which reason these payment systems account for merely 14.67% of total transaction value. By contrast, the TARGET2-Slovenija system is primarily for the settlement of large-value payments, and accounts for 85.33% of total transaction value but just 0.51% of all transactions.

Figure 1: Breakdown of number (left) and value (right) of transactions by payment system in 2021

Establishment of instant payments

A major development in 2021 was the establishment of instant payments, whose use in Slovenia is expanding rapidly. Nine more banks and savings banks operating in Slovenia introduced cross-border instant payments last year (taking the total to 11 by the end of the year), all banks and savings banks in the country having joined the domestic instant payments system by 2020. Instant payments allow the payee to receive the funds in their account immediately or shortly after the payer has submitted the payment order. They are available to users 24 hours a day, every day of the year. The average value of an instant payment in 2021 was EUR 289.

Figure 2: Instant payments in 2021: value and number