Hungary launches same-day credit transfer system

The National Bank of Hungary today (July 2) said a system of intraday credit transfers had been launched "smoothly".

"From today, electronically submitted credit transfers will reach their destination within a maximum of four hours, instead of the earlier transfer time of one business day," said the central bank.

The system was introduced following a development project that lasted nearly two years. The faster transfer time is only for domestic forint payments. As the system operator settles items submitted to it by banks every two hours, the central bank said in the "vast majority" of cases, credit transfers are expected to be settled within a shorter period of time.

The central bank said the project was the most significant improvement to the domestic payments system in the past 15 years.

"The successful launch of intraday credit transfers is a milestone in Hungarian payments," said András Simor, the governor of the central bank.

The costs to the banking sector of implementing the new system have been considerable. When the central bank set the July 2012 deadline for the switch to intraday, a Bank official put the costs at 7–8 billion forints ($31–35 million).

Mihály Patai, the chairman of the Hungarian Banking Association, said that the development projects implemented in the past two years posed "major" challenges for domestic payment service providers, who invested substantial financial resources in the establishment of a more modern payment system that better meets customer needs. He added that multiple intraday settlements contribute to significant changes in bank liquidity management.