Payment systems in 2020: operating smoothly even in the epidemic, while card payments see the most notable changes
Last year just over 240 million payments totalling just under EUR 549 billion were settled in payment systems in Slovenia. The average payment in card payment systems was a little under EUR 50, while the average payment in the TARGET2-Slovenija large-value payment system was around EUR 485 thousand. Compared with previous years, amid the epidemic the main changes were seen in card payment systems, where the value and number of transactions were down approximately a tenth. The TARGET2 system saw an increase in transaction value, while there were no notable developments as far as the BIPS and SIMP-PS payment systems were concerned. Ensuring the smooth functioning and operation of payment systems is one of Banka Slovenije’s key tasks, and it was successful in performing this task in 2020, despite the Covid-19 epidemic.
Payment systems represent infrastructure for circulating money in the economy, and for transferring and settling money between financial intermediaries. They provide for the reliable flow of money between central banks, their counterparties (banks), and other participants in the financial system. At the same time, as part of the financial infrastructure, they represent one of the pillars of a stable and efficient financial system.
Last year was marked by the Covid-19 epidemic, which is still ongoing, and brought changes to the way of life for many people, and changes to the ways of working at many organisations. Under these circumstances, Banka Slovenije and the private payment system operators have shown their readiness to work in contingencies, as the outbreak of the Covid-19 epidemic had no impact on the functioning of payment systems in Slovenia in the sense of availability.
Card payment systems
In the card payment systems operated in Slovenia by Bankart and Banka Intesa Sanpaolo, just under 78 million payments were settled in 2020, with a total value of just over EUR 3.7 billion (compared with more than 86 million payments with a total value of just over EUR 4 billion in 2019). The average payment was just under EUR 50, as was the case in 2019. Card payment systems support the processing of card payments, including cash withdrawals at ATMs, and payments at bricks-and-mortar and online points of sale.
The Covid-19 epidemic had a significant impact on the number and value of transactions in card payment systems, which were both down just under 10% on the previous year. Banka Slovenije has also identified a shift in card payments from bricks-and-mortar points of sale to online sales, and a decline in the number of withdrawals at ATMs, which are described in detail in analysis of the impact of the epidemic on card payment patterns and the use of cash.
TARGET2-Slovenija payment system
TARGET2-Slovenija is by far the largest payment system in the country in terms of value, and in 2020 accounted for around 85% of the total value of payments processed in Slovenia’s payment systems, through just under a million payments totalling just over EUR 473 billion. It processed a value equivalent to Slovenia’s entire GDP every 26 business days, an indication of the importance of the payment system.
The average payment settled was just over EUR 485 thousand (compared with EUR 358 thousand in 2019). Total transaction value was up just under 30% on the previous year, while the number of transactions fell by approximately 5%.
The TARGET2-Slovenija system is part of the TARGET2 payment system operated by the Eurosystem. This is primarily designed for urgent payments and large-value payments, and is used for interbank payments, payments related to monetary policy operations, and payments executed within the framework of other systems and financial market infrastructure. In terms of the value of payments settled, the system is one of the largest and most systemically important payment systems in the world.
BIPS and SIMP-PS payment systems
The BIPS, which is operated by Bankart, provides for the settlement of domestic credit transfers (e.g. UPO payments via online banks or bank counters) and instant payments. More than 130 million credit transfers worth a total of just under EUR 70 billion were settled last year. The average payment was EUR 535. The changes in the number of payments compared with 2019, like those in the total value and average value, were negligible.
Credit transfers settled in the BIPS accounted for approximately half of the total number of payments, the highest share of Slovenia’s payment systems. The BIPS accounted for an insignificant share of instant payments in 2020 (well below 1%).
Bankart also operates the SIMP-PS, which provides for the settlement of domestic direct debits. The average domestic direct debit payment was almost the same as the average card payment (just over EUR 50), but the smaller number of payments means that this system accounts for the lowest share of total payments in Slovenia’s payment systems in terms of total value. The SIMP-PS also saw negligible changes compared with 2019.
Figure 1: Number and value of transactions in payment systems in Slovenia, 2010 to 2020
Note: The fall in the value of payments in 2015 was primarily technical in nature, owing to a change in how intraday loans are drawn down.
Source: Banka Slovenije
Figure 2: Breakdown of number (left) and value (right) of transactions by payment system
Source: Banka Slovenije