Latvijas Banka is set to ensure direct participation of payment and e-money institutions in central bank payment systems

Thus, Latvijas Banka will ensure the direct participation of payment and electronic money institutions in the EKS (the Electronic Clearing System) and TARGET-Latvija.

"Latvijas Banka aims at creating a modern, diverse, accessible, and internationally competitive financial sector. This strategic direction is largely driven by the integration of the Financial and Capital Market Commission and its supervisory functions into Latvijas Banka. The early adoption of the Eurosystem's harmonised policy, supported by Latvijas Banka, granting non-bank payment service providers direct access to payment systems maintained by euro area central banks, will enhance competition and drive innovation within the European payments market, as well as foster wider implementation of instant payments across the European Union. Latvijas Banka is fully prepared to swiftly launch new services for non-bank payment service providers. We have already completed the technical modifications to our system, enabling non-bank payment service providers to join the EKS," emphasises Mārtiņš Kazāks, Governor of Latvijas Banka.

Payment and e-money institutions will be eligible to join the EKS upon the Saeima's adoption of the necessary amendments to the national legislation.

The EKS is Latvijas Banka's payment system ensuring the processing of customer payments across the Single Euro Payments Area (SEPA) and provides both instant payment and clearing services. In turn, TARGET is a settlement system that provides its participants with large-value and urgent interbank settlements in central bank money. TARGET-Latvija is a component system of TARGET operated by Latvijas Banka.

Latvijas Banka has completed the necessary system modifications to ensure the direct participation of payment and e-money institutions in the EKS. The system is already available for testing. At present, Latvijas Banka is consulting payment and e-money institutions about the opportunities to use the new service. These institutions are sharing information with Latvijas Banka regarding their technical readiness and are receiving guidance on the subsequent steps needed to prepare themselves for participation in the EKS. Furthermore, access to the TARGET system is planned as of April 2025.

The European Central Bank (ECB) has commenced the drafting of the legal acts required for the implementation of the harmonised policy.

More information on the Eurosystem's harmonised policy concerning the direct participation of non-bank service providers in payment systems is available on the ECB's website.