The domestic instant payment system, which will be implemented on July 20 by the Central Bank of Bosnia and Herzegovina, represents the largest reform and modernization of payment transactions in the country since 2001, said Jasmina Selimović.
The new system will enable money to be transferred from one account to another in seconds, regardless of whether the transaction is happening during the workday, weekend, or holidays.
“The system will operate 24/7, 365 days a year. The moment the user submits a payment order to his commercial bank, the bank issues it to the Central Bank of Bosnia and Herzegovina for processing, and money arrives in the recipient’s account in seconds,” Selimović explained.
Unlike the instant-payment system, the current system carries out four settlements. This means that transactions sent after working hours may not reach the recipient until the next day.
Selimović emphasized that the new system will enable citizens to send and receive money faster, manage their family budgets more efficiently, and provide greater business predictability and better liquidity management for business entities.
“The companies will be able to plan in detail when to send money and when it will be at their disposal. With this, the business cycle will gain a new dynamic, and the companies will be able to better manage their cash flows and improve liquidity, which is currently limited by the current payment system,” she said.
The Governor emphasized that the system was developed using internal capacities, with the involvement of the Central Bank of Bosnia and Herzegovina’s staff, supported by the Bank of Italy and the European Central Bank.
It is about a solution based on the European TIPS system, which is adopted for the Western Balkan countries. Among the countries of the region that joined the initiative, Bosnia and Herzegovina and Montenegro are ready to implement it immediately, while the remaining countries are expected to do so by the end of the year.
The platform will be available to all commercial banks in Bosnia and Herzegovina as of July 20th, but not all of them will join at the same time.
Banks that complete functional, operational, and technical testing and meet the Central Bank of Bosnia and Herzegovina’s conditions will access the platform from day one, while the rest will join successively after meeting the required technical preconditions.
“All commercial banks are informed and are in different stages of preparation. We are already conducting testing with a large number of banks,” Selimović said.
She emphasized that the launch of the system on July 20th won’t be a pilot project or a test stage, but a fully functional production environment.
The inclusion of banks will be done individually in controlled conditions to carefully monitor the system’s operation from the start.
“It is a new thing in payment transactions, and it is very important that the production and operational performance of the system is carefully monitored from the beginning. Mistakes in this area are not desirable for anyone,” the Governor said.
Speaking about the price of the service, Selimović said that the Central Bank has adopted a decision on fees, and that the fee for instant transactions is significantly lower than the one it currently charges commercial banks for the existing gyro clearing services.
“It is very important that the system is price-competitive, because our goal is for it to become widely accepted and to completely replace the existing payment system in the future, based on gyro clearing services and settlements in real time,” she said.
According to her, the competitive price is one of the main conditions for the system to become widely accepted and to achieve its full functionality and inclusion of all banks in a year or two.
The Central Bank of Bosnia and Herzegovina will conduct financial literacy activities to explain the use and benefits of the instant payment system to citizens, especially SMEs.
In the first stage, the system will be limited to domestic transactions within Bosnia and Herzegovina.
The next stage includes introducing additional services, including payment via QR codes, support for point-of-sale payments, and online payments, as well as other digital financial services.
The system has been developed for such upgrades, as Selimović emphasized.
Cross-border instant transactions are also planned, but the start date has not yet been set.
“We will track the dynamics of the system’s development and acceptance in Bosnia and Herzegovina. Once we estimate that the system has been fully accepted in the domestic market, we will be ready to go beyond the borders,” she said.
Selimović expects banks to actively participate in client education and highlighted that during project preparation, they were ready to cooperate with the Central Bank and participate in all activities.
Special focus was on the system’s security and users’ protection.
As a solution based on a system implemented in Eurosystem countries, its architecture features built-in European protection standards for the payment system and user data.
“It is about a top architecture which ensures a high level of security,” she emphasized.
Initially, the Central Bank of Bosnia and Herzegovina set a limit on individual instant transactions at 5,000 BAM, with the option to adjust it in line with market trends and user needs.
Selimović warned that, despite built-in security mechanisms, users must carefully enter the recipient’s data and use authentication methods responsibly.
“The Central Bank will do its part regarding the detection of suspicious transactions and possible deceits, but individuals and legal entities must pay attention to how they enter data and use the system,” she said.
Speaking about the project’s significance for Bosnia and Herzegovina’s path to Europe, Selimović estimated that the country, with its implementation, will already be integrated into the European payment system.
“This is a form of accelerated integration of Bosnia and Herzegovina into the European Union. The Bank of Italy administers an identical system for European Union countries, which is now also available to the Western Balkans. It means that once we access the European Union, our payment system will already be ready,” she said.
According to her, the banking sector in Bosnia and Herzegovina has been largely aligned with the rules and standards of the European Union.
The Governor pointed out that the European Banking Authority confirmed the equivalence of the banking regulations in both entities in 2021, officially confirming the high degree of alignment between the domestic banking system and European standards.
She added that, with other, smaller participants in the financial market, the same degree of alignment has not yet been reached, and that it will be necessary to continue the reforms in the upcoming period.
When it comes to the Central Bank and monetary policy, Selimović reminded that it is conducted in line with the currency committee’s principles, which limit the range of instruments at the institution’s disposal.
“We strive to ensure that all functions of the Central Bank, to the extent permitted by law, are aligned with European Union requirements. When it comes to the payment system, which we own, we are certainly aligned with the European standards,” Selimović concluded.
