Instant payment – In the right place at the right time

Instant payment – In the right place at the right time



Ágnes Rakó


KPMG in Hungary


According to the MNB's recently issued publication, instant payment is highly popular among customers. The experience of the first month shows that clients be well disposed towards instant, continuously available transfer method. Since the initiation of the instant payment on 2 March, the number of transfers has been 9.3 million, and their total value has exceeded HUF 1,363 billion. In the instant payment system, the average daily number of transactions was 385 thousand on weekdays and 106 thousand on weekends. These numbers are expected to converge over time, because customers have been accustomed to non-instant execution of transfers initiated outside banking operation hours and as a result, in many cases no transfers were initiated on weekends. It is expected that the transformation of the client’s way of thinking will take more time. As a significant proportion of transfers were automatically routed to this channel, the number of transactions may be a weaker indicator of popularity. The enthusiasm of clients is better reflected in the fact that more than 32,000 secondary IDs were registered in the month after initiation. According to the MNB's publication, e-mail addresses and telephone numbers were registered as secondary identifiers in almost equal proportions. In any case, intensive use of this payment method has started, which is expected to continue to grow.

Although according to the original plans, instant payment would have started in the summer of 2019, MNB postponed the deadline to March 2020 in order to ensure the stability of payment system. Even though the current epidemic situation was not yet visible at the time of the postponement, the initiation date was a lucky choice in this respect as the introduction just preceded the deepening of the COVID-19 epidemic situation in Hungary and the subsequent government measures. On the one hand, this is fortunate from the bank's point of view, as the implementation could take place on-site with full resource capacity. On the other hand, it is also favourable on the customer side, as the current, changed life situation raises a number of needs that can be solved by instant payment. In the current situation, parents and grandparents cannot meet their children and grandchildren in person. Instant payment could offer an alternative way to hand over money to our relatives and friends. Many businesses have switched to home delivery, including those that have not previously set up an online payment service. They can also benefit from 24/7 operating instant payment, as the value of orders placed during the day, weekend or even at night is immediately received. Instant payment is also a secure payment alternative in an epidemiological situation, because it can alternate a significant portion of cash transactions. The importance of transfer is further enhanced by the fact that the possibility of face-to-face meetings and thus cash transfers are significantly reduced. Furthermore, we can easily support the fundraising of various organizations with this payment service. Thus, the epidemic situation supports the spread of instant payment even more widely.

Overall, the introduction of instant payment took place just in time, almost at the last minute, at least regarding the epidemiological situation.

Following the fulfilment of the mandatory elements of instant payment, based on MNB's announcement, domestic banks will make further extensive developments in the field of innovative ancillary services. It is expected that during the next period, many financial institutions will expand their services. These services include the ability to send and receive payment requests, the development of mobile applications to scan and display QR codes, and support for contactless payment technology. These innovative services can further increase the popularity of instant payment.

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