Home Payments Riksbank ‘adapts to future’ with instant payments service RIX-INST

Riksbank ‘adapts to future’ with instant payments service RIX-INST

Sweden: RIX-INST should 'create opportunities for Swedish companies to develop new innovative payment services', the Riksbank says | Credit: chiprida; Pixabay

Sveriges Riksbank has this week launched an instant payment settlement system that operates round the clock as it looks to ‘adapt to a future in which payment flows are increasingly fast’.

The central bank’s service is named RIX-INST, which becomes the latest addition to the global payments lexicon alongside other recently created central bank services such as Brazil central bank’s Pix and the US Federal Reserve’s in-development FedNow.

Payments between banks in the Scandinavian country can now be made in real time 24 hours a day and 365 days a year in central bank money, the Riksbank said in its announcement about Sweden’s new instant payments service.

The Riksbank explained that, in launching RIX-INST – an extension of the country’s existing payments system Rix – it is ‘offering the banks a secure and cost-effective payment system for instant payments that creates opportunities for Swedish companies to develop new innovative payment services’.

Sweden, a nation with a high rate of digital payments usage among citizens, is a member of the European Union (EU) but – unlike 19 of the EU’s 27 member states – does not use the euro. RIX-INST will nonetheless be connected to TARGET Instant Payment Settlement (TIPS), the platform established by the Eurosystem – which comprises the European Central Bank (ECB) and central banks of euro countries – in 2018.

‘The fact that the Riksbank is sharing a platform with other central banks provides economies of scale and lower costs for society than if the Riksbank were to develop its own system,’ the central bank said in its announcement, adding that ‘in addition, Swedish companies will have the opportunity to develop new payment services on a common European platform.’

Taking TIPS from the eurozone

The Riksbank points out in its announcement that instant payments, when bank customers move money from one bank to another in just seconds, are becoming increasingly common worldwide.

In Sweden around two million instant payments occur each day via mobile payments app Swish, which was launched a decade ago by six of the country’s biggest banks.
‘Work on transferring Swish payments to RIX-INST is underway and is scheduled to be completed at the start of 2023’, the Riksbank said in its announcement.

Further explaining the development of RIX-INST, the central bank said that ‘all participants can use the system safely and on equal terms and the tasks are more clearly allocated between the public and private sectors – the private sector offers payment services to its customers and payment settlement takes place at the Riksbank.’

“The existing RIX system is designed for large-scale payments and has limited opening times,” said the Riksbank’s payments department’s deputy head, Mats Wallinder. “Like all the players in the payment market, the Riksbank needs to adapt to a future in which payment flows are increasingly fast. This is why the Riksbank has developed RIX-INST, where the ECB’s Target Instant Payment System (TIPS) platform stands for the technical solution”.

Harmonisation towards European standard

Progress towards RIX-INST’s launch was set out last November by the Riksbank in a report on payments-related developments (46-page EN language version).  

The central bank expanded on why it intended to use the Eurosystem’s payments platform, giving reasons including doing so reflects the ongoing harmonisation of the Nordic region’s payment markets towards a European standard.

‘A further possible advantage is that payments to and from the eurozone can be faster, simpler and cheaper when the Swedish krona and the euro are available on the same technical platform,’ the Riksbank explained.

The Riksbank and Frankfurt-headquartered ECB began investigating the possibility of such a solution in 2020, with the ECB confirming in June 2021 that TIPS can be used for cross-currency payments. 

Eighteen months ago Denmark’s central bank, Danmarks Nationalbank, applied to join the ECB’s real-time gross settlement system (RTGS) payment system T2 by 2025, as well as expressing interest in joining TIPS within the same timeframe.

Brazil’s central bank launched instant payments platform Pix 18 months ago and marked its first year of operation last November by announcing that almost two-thirds of Brazil’s adults are using it to make or receive payments.

In the US the first tests have recently been completed using FedNow – a new round-the-clock real-time payment and settlement service that the Federal Reserve Banks are developing to support faster payments across the country.


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