On March 2, 2020, at 00:00, the Instant Payment System (IPS) went live in the domestic payment transactions between the account-holding banks. In the first week after the setting, all clearing members of GIRO Ltd. successfully took the obstacle. From this date, domestic financial institutions will ensure the immediate transfer of HUF-based payment orders within the required 5 seconds in 0-24 hours every day of the year – if the orders meet the conditions of the IPS. This means that transfers initiated over the weekend or after banking hours will also be executed instantly.
According to GIRO Ltd., the central infrastructure “GIRO Instant” settled more than 1 million transactions in the first two and a half days after the starting day, worth more than HUF 150 billion. Transaction processing is continuous, the system works without errors.
The strict requirements of the Instant Payment System have also been successfully addressed by financial institutions using the Electra electronic channel’s family.
All of our partners offer instant payment services through electronic channels provided to corporate customers. In case of the following Hungarian account service providers:
CIB Bank, Commerzbank, Erste Bank, Gránit Bank, K&H Bank, KDB Bank,
KELER, MKB, the National Payment Service Provider, OTP Bank, Polgári Bank,
Raiffeisen Bank, Hungarian Savings Bank, and the UniCredit Bank,
instant transfer orders can be initiated and received in the Electra Internet Banking, the Electra Client Program, and the Mobil bank and MobilApp applications.
When initiating IPS transaction items on the user interfaces delivered to our partners, Electra checks the IPS eligibility of the orders, it maintains the pre-filtering according to the criteria defined by GIRO. In case of secondary account identifiers their syntactic control will be provided by Electra.
When inputting an IPS order, choosing from the four secondary ID types currently offered by the interface, the field to be filled in accepts only the structure of the given secondary ID type. Thus, Electra performs different checks on email addresses, mobile phone numbers, tax IDs and tax identification numbers.
At the moment of sending the payment instruction addressed with a secondary ID to the bank, in order to be able to settle the orders in the GIRO system, Electra makes a web service call to the GIRO Central Account ID Register through the bank’s back end and translates the IDs to IBAN number registered behind them. (Unlike the general solution, we also handed over an implementation where Electra communicates directly with the GIRO Register).
The MNB decree regulating IPS transfers regulates the submission of IPS orders differently for corporates, consumers, and retail customers. Due to the fact that Gránit Bank, KDB Bank and the Hungarian Savings Bank use the communication channels of Electra for corporate as well as for retail clientele, therefore the special procedures for that client segment had to be taken into account in the developments.
Substantial management of secondary account IDs is available on the Electra clients of almost all banks, allowing them to register, modify, delete, and query the IDs – according to the registered user rights. Electra user interface ensures the mandatory annual verification of account IDs between the bank and its customer, as well as the recorded management of the communication about it.
For many banks, prior to the processing of IPS transactions initiated in Electra UIs, Electra System forwards them directly to the banks’ fraud systems, where each bank can approve or reject the initiation of the order after proceeding the real-time verification of the items. (Electra UIs provide more than a dozen characteristics and information related to a given payment item to bank fraud systems).
During the various steps of the order procedure continuous status initiation is available on the Electra UIs – depending on the information supplied by the banking back ends. Based on this visualization user can monitor the individual phases of the execution of a given order package during the procedure cycle.
Handling of Request to Pay messages, as an optional service using the Instant Payment System’s infrastructure is currently implemented by only a few numbers of our partners. Although offering the service is optional for the banks based on the forward-looking ideas of the National Bank of Hungary as well as its potential to further financial innovations, we expect an exciting flourish of new business lines using Request to Pay services.
We will inform you on more detailed features of the Request to Pay message management available in Electra System in our later newsletter.
Image source: napi.hu (getty images)