FIMBank part of TARGET2 European payment system

06.09.2017

FIMBank plc has announced its direct participation in TARGET2, a payment system owned and operated by the European Central Bank Eurosystem. TARGET2 is the leading European platform for processing large-value payments, and is used by both central and commercial banks to process real time payments in Euro.

Commenting on this landmark development, FIMBank’s Group Chief Operating Officer Howard Gaunt stated that, “Modern economies are heavily dependent on the safe and seamless flow of transactions. Payment systems provide the plumbing that allows money to flow in the economy. TARGET2 enables EU banks to transfer money between each other in real time, which is known as real-time gross settlement (RTGS). More than 1,700 banks use TARGET2 to initiate transactions in Euro, either on their own behalf, or on behalf of their customers. Taking into account branches and subsidiaries, more than 55,000 banks worldwide (and all their customers) can be reached via TARGET2.”

FIMBank’s Head of Banking Operations & Project Management Loranne Pace, explained that “Our membership to the TARGET2 system means that we will now be able to receive Euro payments directly from banks through the TARGET2 network. This also means that we are now in a position to process priority payments on behalf of our customers.” She further added that such membership will allow the bank to provide a Payments Priority Service, for which a respective fee applies.

As part of the advantages of TARGET2 payments, FIMBank is now directly reachable for Euro payments without the need for payments to go through its Euro correspondents. Membership of the system also facilitates the processing of high value priority payment orders in ‘safe’ central bank money with immediate finality, even across borders, thus reducing the inherent risks in payment transactions. Moreover, TARGET2 allows for extended cut-off time for Euro payments. The system also allows for straightforward direct settlement, thereby minimising claims from beneficiaries for non-receipt of funds. Finally, national and cross-border payments are processed in the same way, with beneficiary banks being addressed directly.

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