Bulgarian ‘phygital’ challenger TBI Bank recently became the first financial institution in Southeast Europe to partner with the Bank of Lithuania to launch Sepa instant payments.
Sepa instant payments was first proposed by the European Payments Council (EPC) in November 2015 and was established after rapid shifts in payments processing and in turn, payments innovation, welcoming digital solutions and real time payments.
The era of 24/7/365 begun. Sepa instant payments enabled instant, or next-to-instant transaction clearing, crediting and confirmation across Europe, regardless of the instrument - credit transfer, direct debit or payment card - used.
Today, new financial entrants are encroaching on the incumbents’ share of banking provision with banking-as-a-service (BaaS) which allows fintech companies to connect with the systems of traditional lenders in a transparent fashion and build bank-like services for their clients.
TBI Bank CEO Petr Baron highlights to Finextra Research that “we invest in digital infrastructure for our customers, and BaaS is the cherry on top as we can offer the same services to our partners.”
Baron continues to say that following a BaaS model will result in the need to change “a number of infrastructure components to ensure that true benefits can be derived from new projects, while also keeping costs low.”
With this “democratisation”, Baron adds that it makes sense for digital banks to utilise internal services, rather than turning to external providers. However, TBI Bank is still able to use the same technology and infrastructure to benefit the customer a la BaaS and therefore, Sepa instant payments.
TBI Bank customers are now able to send and receive up to €15000 within the European Union and EU Economic Area via Bank of Lithuania. The service will first be open to business partners, starting with digital consumer lending group 4Finance in four EU markets and later serve retail customers.
Baron says: “This is a move of major importance for us - it proves that our investments in cutting-edge digital solutions are beneficial for our business partners and customers. Our clients will have déjà vu: for them the new service will remind them of the switch from dial-up internet to broadband.”