Banco de Portugal releases today the Payment Systems Report for 2012. This Report includes an analysis of developments in payment systems and means of payment (excluding cash) in Portugal and describes the main activities Banco de Portugal carried out over the year, in its capacity as operator and supplier of payment and settlement services in central bank currency, catalyst and promoter of the efficiency and development of payment systems, oversight authority and regulator.

By smoothly processing transactions conducted by economic agents and by transmitting monetary policy effectively, payment systems play a key role in the economy’s stability and efficiency.

Main developments

In its catalysing role, in 2012 Banco de Portugal continued to foster implementation of the European Project to create SEPA, the Single Euro Payments Area, (1), in close cooperation with the main national and European stakeholders.

The imposition of 1 February 2014 as the deadline for migration to SEPA, through Regulation (EU) No 260/2012 published on 30 March 2012 (2), reinforced the need for the Portuguese community to focus on this project. For the transition to be timely, in 2012 Banco de Portugal participated actively in the preparation of a National Migration Plan for SEPA, which sets out a series of initiatives, timelines and quantitative objectives for migration.

In 2013 Banco de Portugal continued to implement a number of additional measures for SEPA communication and promotion, including a cycle of seminars on “SEPA: time to act” addressed to enterprises and general government bodies. As at August 2013, 66.5 per cent of credit transfers and 0.77 per cent of direct debits originating in Portugal were processed in SEPA format.

As regards oversight activities, Banco de Portugal continued to analyse the new oversight principles published in April 2012 by the Committee on Payment and Settlement Systems (CPSS) and the technical committee of the International Organization of Securities Commissions (IOSCO) and related implementation aspects, especially within the Eurosystem.

Banco de Portugal has also monitored the preparation of European legislation on central securities depositories (CSDR – Central Securities Depository Regulation) and participated actively in the preliminary draft for transposition of the Electronic Money Directive that culminated in the publication of Decree-Law No 242/2012 of 7 November.

2012 was also marked by the intensification of the preparatory work for the T2S project (TARGET2-Securities) (3). Key developments include the signing of the Framework Agreement between national central banks and central securities depositories (CSDs) (4), the delivery of feasibility studies analysing the impact of the connection to T2S on those entities’ in-house systems, as well as Banco de Portugal’s launch of its in-house connection to T2S.

As of 1 October 2012 Banco de Portugal released a new service on its website allowing enterprises and households to consult information on the prohibition of the use of cheques.

Main figures

In 2012 the gross settlement system TARGET2-PT (5) processed 1.6 million transactions (moving close to the 2008 historical peak), amounting to €4.6 trillion (6). This means that TARGET2-PT settled around 28 times the Portuguese GDP that year.

The considerable fall in total value of settled amounts (34.9 per cent less than 2011) was mainly due to a contraction of the value of transactions conducted among financial institutions, given the current economic and financial situation. Meanwhile, the amounts settled through standing facilities experienced remarkable growth (60.8 per cent more).

SICOI (7) processed 1,984 million transactions (slightly below the number of transactions processed in 2011), totalling approximately €324 billion (5.8 per cent less than in 2011).

The downward trend of the number and value of transactions processed using paper-based payment instruments was continued. This meant a decline of 17 per cent in number and 20 per cent in value processed in the ‘Cheques’ sub-system and a reduction of 19 per cent in number and 20 per cent in value processed in the ‘Bills of exchange’ sub-system.

In particular, there was a considerable decline in the number of lower value cheques, as a reflection of a gradual replacement of cheques with electronic payment instruments, which are simpler to use in day-to-day transactions.

Similarly, the number and value of transactions processed in SICOI using electronic payment instruments continued to grow. Only the Multibanco sub-system countered this trend, with a decline against 2011 of 1.1 per cent in number and 1.5 per cent in value, in line with developments in private consumption in Portugal in the period under analysis.

In 2012 these two interbank settlement systems (TARGET2-PT and SICOI) worked smoothly.

Lisbon, 16 October 2013

(1) With the implementation of SEPA, households, enterprises and general government bodies may make payments in scriptural money in 27 European Union Member States and Iceland, Liechtenstein, Monaco, Norway and Switzerland, by using a single bank account located in any country in that area and a single set of payment instruments (credit transfers, direct debits and cards).

(2) Which also establishes the technical and business requirements for the execution of credit transfers and direct debits in euro.

(3)The T2S project is aimed at constructing a technical platform of the Eurosystem for the provision of securities settlement services in central bank currency to securities depositories and financial market participants.

(4)The T2S project is aimed at constructing a technical platform of the Eurosystem for the provision of securities settlement services in central bank currency to securities depositories and financial market participants.

(5) Trans-European Automated Real-time Gross settlement Express Transfer-system.

(6) € trillion = 1012 euros.

(7) Interbank clearing system processing payment transactions in amounts not exceeding €100,000, with cheques, bills of exchange, (traditional and SEPA) direct debits, (traditional and SEPA) credit transfers and bank cards.