CBBH Governor: Instant payment system to enable transfers within seconds from July 20

The new system will enable money to be transferred from one account to another in just a few seconds, regardless of whether the transaction is made on a working day, weekend or public holiday.

"The system will operate 24 hours a day, seven days a week, 365 days a year. From the moment a user submits a payment order to their commercial bank, the bank forwards it to the Central Bank of Bosnia and Herzegovina for processing, and within seconds the funds are credited to the recipient's account," Selimovic explained.

She said the new system would allow citizens to send and receive money more quickly and manage household budgets more efficiently, while businesses would benefit from greater predictability and improved liquidity management.

"Companies will be able to plan precisely when they send funds and when they will be available to the other party. This will bring new momentum to business cycles, enabling firms to manage cash flows more effectively and improve liquidity, which is currently constrained by the existing payment system," she said.

Selimovic emphasized that the system had been developed using the Central Bank's internal capacities, with the work carried out by its own staff, supported by the Bank of Italy and with the approval of the European Central Bank (ECB).

The solution is based on the European TIPS (TARGET Instant Payment Settlement) system and has been adapted for the Western Balkans. Among the participating countries, Bosnia and Herzegovina and Montenegro are ready to begin implementation immediately, while the remaining countries are expected to join by the end of the year.

From July 20, the platform will be available to all commercial banks in Bosnia and Herzegovina, although not all will join at the same time.

Banks that have completed functional, operational and technical testing and met the Central Bank's requirements will connect to the system from day one, while others will join gradually after fulfilling the necessary technical prerequisites.

Banks will be integrated individually and under controlled conditions to allow the system's operation to be closely monitored from the outset.

Speaking about pricing, the Governor said the Central Bank had adopted a tariff decision under which fees for instant transactions are significantly lower than those currently charged to commercial banks for existing giro clearing services.

According to her, competitive pricing is one of the key conditions for the system to gain widespread acceptance and achieve full functionality with the participation of all banks within the next one to two years.

The Central Bank will also conduct financial literacy activities to explain the use and benefits of instant payments to citizens and businesses, particularly small and medium-sized enterprises.

The next phase will include additional services such as QR code payments, point-of-sale payments, online payments and other digital financial services.

Selimovic noted that the system had been designed to accommodate such upgrades.

Cross-border instant payments are also planned, although the launch date has not yet been determined.

She added that particular attention had been paid to system security and user protection.

As the solution is based on a system already used within the Eurosystem, its architecture incorporates European standards for payment system security and the protection of user data.

In the initial phase, the Central Bank has set a limit of 5,000 Bosnian marks (some €2,500) per individual instant transaction, with the possibility of adjusting the limit in line with market developments and user needs.

Speaking about the project's importance for Bosnia's European integration, Selimovic said the country would effectively become integrated into the European payment system through its introduction.

"This represents a form of accelerated integration of Bosnia and Herzegovina into the European Union. The Bank of Italy administers the same system for EU member states, and it is now available to the Western Balkans as well. This means that once we join the European Union, our payment system will already be fully prepared," she said.

According to her, Bosnia's banking sector is already largely aligned with European Union rules and standards.

She recalled that the European Banking Authority confirmed the equivalence of banking regulation in both entities in 2021, officially recognizing the high level of alignment between Bosnia's banking system and EU requirements.

Regarding the Central Bank and monetary policy, Selimovic noted that policy is conducted under the currency board arrangement, which limits the range of instruments available to the institution.

"We strive to ensure that all Central Bank functions, to the extent permitted by law, are aligned with European Union requirements. As far as the payment system, which we own and operate, is concerned, we are fully aligned with European standards," Selimovic concluded.