Payments Systems - Approval Process

A payment system is a set of instruments, banking procedures, and interbank funds transfer systems, which facilitate the circulation of money in a country or currency area. It can also be referred to as a fund transfer system. These come in a multitude of designs and mechanism for transfer, but all have the functionality to transfer funds

Eurosystem oversight of payment systems primarily distinguishes between systemically important payment systems (SIPS) and non-systemically important payment systems (non-SIPS).

This distinction is mainly based on criteria related to size, market share, cross-border activity and the provision of settlement services to other financial market infrastructures.

The classification of euro area payment systems is reviewed annually. 

ECB: Payment Systems

TARGET Services

TARGET Services are services developed and operated by the Eurosystem. These financial market infrastructure services include T2 (for settling payments), T2S (for settling securities), and TIPS (for settling instant payments).

STEP2-T

STEP2-T is operated by EBA Clearing STEP2 is a Pan-European Automated Clearing House processing retail payments in euro.

RT1

The RT1 System is a pan-European real-time gross settlement payment system, operated by EBA Clearing, for the execution of SEPA Instant Credit Transfers (SCT Inst) and One-Leg-Out Instant Credit Transfers (OCT Inst). The payment system operates around the clock on every day of the year. RT1 processes euro transactions between payment accounts in a few seconds end to end, and with immediate availability of the payment amount to the beneficiary. Transactions between RT1 Participants are processed on average in just over one second.

Irish Paper Clearing Company (IPCC)

The Irish Paper Clearing Company maintain and operate a payment, clearing and settlement system for cheques in Ireland.

Central Bank of Ireland is responsible for approving the establishment of new payment systems in Ireland under Section 7 of the Central Bank Act 1997 (the "Act"). Section 9 of the Act provides the Central Bank with the power to approve the rules of payment systems proposing to establish in the State. The Act also provides the Central Bank with the power to determine the form of any such application for approval, including the required details . Furthermore, the Act provides for such approval to be contingent on conditions or requirements, as determined by the Central Bank.

Pre-application process

Submission of Key Facts Document - The purpose of the Key Facts Document (KFD) is to provide the Central Bank with information on, amongst other things, the payment system's business model, corporate structure and the infrastructure supporting its operations. This is to understand the applicant's proposal and to identify any significant issues, which might affect an application from progressing to authorisation on time. Following submission, the Central Bank will seek clarifications in relation to the content of the KFD. This could necessitate the amendment and resubmission of the KFD to the Central Bank. The KFDrequirements for a payment system can be obtained from the Central Bank upon request to [email protected].

Engagement - Once the KFD is deemed sufficient by the Central Bank, the applicant firm will be invited to a series of meetings with the Central Bank concerning specific aspects of the submission. These meetings will discuss areas that may require further consideration by the applicant prior to the submission of a full application.

Formal application process

Once the proposed payment system has completed the pre-application process, a formal application can be submitted to the Central Bank. As per Section 9(1) of the Act, all applications received by the Central Bank must be approved or refused within 3 months of the date of submission. Furthermore, Section 9(1)(a) of the Act states that the Central Bank can make its approval subject to conditions or requirements.

For further information on the application process, please contact the Payment Systems Policy & Oversight team at [email protected].

Details for participation in a payment system can be found on the relevant payment systems website. Some common systems are linked below:

TARGET Services: Participation in TARGET-Ireland

STEP-2 Admission Criteria and Default Rules

RT1: Access and Participation Models

IPCC: Members and how to join

The ECB policy on access by non-bank payment service providers to central bank-operated payment systems and to central bank accounts can be found on Eurosystem policy on nonbank access.

To participate in TARGET2-Ireland please see the webpage and documentation below:

Starting in April 2025, non-bank PSPs meeting certain requirements will be able to access TARGET, including T2 (for settling payments) and TIPS (for settling instant payments). The requirements will be set out in the TARGET Guideline and will be the same as those that currently apply to credit institutions.