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We will focus on developments in the payments industry at our Banking Technology conference on November 12th, we have opened registration!
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The Magyar Nemzeti Bank (MNB) provides a direct checking account to Transferwise, through which the company has access to the Hungarian payment system, including the new instant money transfer system and the interbank clearing system (ICS) and the MNB’s Real-time Gross Settlement System (VIBER) – It can be read in the communication of the company sent to our newspaper.
As of today, Transferwise can also maintain HUF accounts for eight million clients, that is, receive and send domestic transfers in Hungary using a multi-currency transfer account.
Why is this a great release?
Access to the payment system is generally limited to banks and insurers. However, during the last decade, the financial sector has undergone a profound change with the arrival of fintech companies. These companies must comply with the same regulations as banks in terms of the services they offer.
Transferwise’s move is unique in the EU, but in 2018 they were once granted non-bank access to the UK payment network, giving them their own checking account run by the Bank of England and access to the payment system. Immediate from UK (Faster payment). Scheme, FPS).
In Hungary, Transferwise, together with the MNB, has also developed this important progress for the EU.
We know that the Hungarian regulator is a pioneer in the EU in this regard, the central banks of other countries do not yet allow direct access to the clearing system for payment service providers, but negotiations between regulators are now taking place.
The company is also looking for direct connections to local payment systems in other countries. The communication also highlights: “Transferwise would like to draw the attention of national banks in other countries to the democratization of access to their financial infrastructure through the example of the MNB and the Bank of England. The fact that fintech companies can compete on equal terms means more favorable offers for consumers ”.
Lower costs and fees
The integration allows Transferwise to offer its service directly without banking partners, reducing its operating costs and therefore offering lower rates over time, and giving customers access to instant payments on their HUF transfers.
The timing of the introduction of lower rates, the scope of the rate reduction has not yet been decided, it depends on the business decision of the company, but the goal is definitely cost reduction and rate reduction with the move.
Unusually, during the COVID epidemic, the company established integration with the MNB and GIRO from different locations: the Transferwise team, the payment and compensation system (GIRO), and the Magyar Nemzeti Bank teams worked together remotely. , but it still took only 9 months to build the integration.
In Hungary, it took about 2 years for banks to join AFR, it only took us nine months, and it would have been even less if the pandemic had not intervened, Balázs Barna, Transferwise’s European expansion director, told our newspaper in an interview. exclusive. leader and added:
The integration sharpened on September 1, which is why it has been working in recent days. Customer experience so far shows that a transfer initiated from Great Britain can reach a Hungarian customer in as little as 4 seconds. Currently 30 percent of Transferwise international transfers are processed immediately, the higher the ratio we want to achieve.
In a statement issued by the company Lajos Bartha, CEO of Magyar Nemzeti Bank He also said: “Together with PSD2, the Hungarian instant payment system has brought a significant change: the competition is intensifying, but new opportunities are also emerging. Both new and existing financial service providers can take advantage of the opportunities offered by the recently introduced regulatory environment, and the instant payment system provides a solid foundation for the development of innovative financial solutions and user services. “
Kristo Käärmann, CEO of TransferWise and its founder said: “Today, the MNB, the first national bank in the European Union, has given direct access to its payment system, allowing millions of users to access a truly competitive service. This is a big step forward. In this way, we do not need an intermediary for referrals, which means that we save time and money for our clients. I believe that the movement of immediate, cheap and transparent money should be a basic service in the 21st century, and this integration has brought us one step closer to that world. Magyar Nemzeti Bank has shown that the financial system can prepare for future changes. “
We will focus on developments in the payments industry at our Banking Technology conference on November 12th, we have opened registration!
Cover image source: Getty Images.
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