xpate, an electronic money institution licensed in Latvia, has become the first non-bank payment service provider to join the Electronic Clearing System (EKS), the payment system operated by the Central bank of Latvia, Latvijas Banka.
This marks the first instance within the euro area where a central bank has enabled direct participation of non-bank payment service providers in a system it maintains.
As of 17 October 2024, Latvijas Banka has opened access to the EKS for licensed payment and electronic money institutions, as well as credit unions.
The move aims to create equal conditions for all Latvian payment service providers and support the development of the payments sector.
Following the implementation of this initiative, xpate has completed the required technical and procedural steps and is now using the EKS clearing service.
“Latvijas Banka provides an innovation-supportive infrastructure that allows companies to develop financial services that are modern, convenient, and tailored to the needs of their customers,”
said Mārtiņš Kazāks, Governor of Latvijas Banka.
“The opportunity for non-bank payment service providers to become participants in the EKS is one of Latvijas Banka’s initiatives to promote the development of the FinTech sector in Latvia. Such an option is currently only available in Latvia.”
Organisations interested in joining the EKS must sign an agreement with Latvijas Banka, ensure their systems are technically prepared, and complete mandatory testing.
Latvijas Banka also provides advisory support throughout the process.
The EKS facilitates payments within the Single Euro Payments Area (SEPA), covering EU and European Economic Area countries.
It offers two services: clearing and instant payments.
Until now, the system was only used by credit institutions and the Treasury.
This development aligns with a European Central Bank decision on non-bank access to payment systems and has been made possible by legal amendments passed by the Saeima, which Latvia implemented ahead of other countries.
Featured image credit: edited from freepik
