With talk of a brand new digital Croatia becoming ever louder, it seems that the powers that be are following suit.
As Bernard Ivezic/Poslovni Dnevnik writes on the 14th of November, 2018, when talking about digital money, especially in the context of whether or not Croatia really needs a form of ”cryptokuna”, the example of Sweden was pointed out. Due to the high level of digital payments and the development of practices where retailers and banks have begun refusing paper money, Sweden decided to introduce a digital krona.
Croatia will not take the same path as Sweden and simply introduce digital currency, but it will have an instant payment system from December onwards, not only in euros but in Croatian kuna. This was announced at the BUG F2 Future of Fintech conference held in Zagreb by the executive director of CNB/HNB (Croatian National Bank)’s payments sector, Ivan Biluš.
The new system will most help banks to carry out business with their fintch players, especially Apple, Amazon, Facebook, Google, and Microsoft. It will also affect the strength of their relationships with card holders who see the ability to make fast payments anywhere as perhaps the most important thing. Biluš noted that the system, which would have the support of the CNB TIPS payment system, will be launched alongside that of the European Central Bank (ECB) on the 30th of November, 2018.
“As of January 2019, we’ll not only have European instant payments in Croatia which are based on the euro, but also Croatian ones [based on the kuna], which will enable the instant transfer of the kuna”, says Biluš. He said that banks in Croatia could negotiate the terms of the new service with the CNB/HNB by December, but also stressed that he didn’t expect the first commercial example of the service to actually be on the market before January next year.
TIPS will enable banks to offer services that are already on offer in the United States and in the United Kingdom, where customers can quickly transfer money from their bank account using IBAN to a foreign IBAN account.
Some of the most well known applications which use fast pay include PayPal, Venmo, Square Cash and Zelle, but also Google Wallet and Facebook Messenger. Despite the country’s desire for a digital Croatia, these apps are not yet available with such a payment function here on the Croatian market.
Biluš repeated several times during his presentation that the race between the fintech and the banks is an unequal one, but that major changes are expected on both sides shortly. He said that the EU, with the ECB, has its own interest in creating a single digital market for the European Union and that it was that which made the central bank enter into this business.
Although the ECB initially announced that the TIPS would cost 0.2 cents per transaction, work within ten seconds and set a limit on the transaction amount to 15,000 euros, the executive director of the payment sector at the CNB claims that the transaction cost will be 0.1 percentage points, and that the money transfer will be able to be completed in no more than two seconds.
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