Money and payments

The Bank of Finland is responsible for the availability and issuance of euro cash in Finland. In addition to cash supply, the Bank of Finland's duties include oversight, i.e. the assessment of the reliability and efficiency of domestic payment and securities settlement systems. In 2021, the COVID-19 pandemic further strengthened the decline in the use of cash and the transition in payment habits.

Digital means of payment have become more widespread, purchases are increasingly made online, and mobile payment has already replaced card payment to some extent.

The COVID-19 pandemic has strengthened the transition in the payments landscape. Due to the protracted pandemic, most of the changes will probably be permanent.

The number of payments transferred via the TARGET2-Suomen Pankki system increased further

The Bank of Finland provides to banks and other financial market entities the Eurosystem’s common TARGET services (Trans-European Automated Real-time Gross settlement Express Transfer system).

TARGET2 is a second-generation payment system operated by the Eurosystem. The number of interbank payments transferred via the TARGET2-Suomen Pankki system increased in 2021, whereas the value of transactions decreased slightly compared to 2020.

Both the European Commission and the Eurosystem have a new strategy on the development of retail payments. One of the objectives is to promote the instant credit transfer (SCT Inst) scheme.

Based on the decision taken by the Governing Council of the ECB in summer 2020, all Payment Service Providers (PSPs) which are reachable in TARGET2 and adhere to the SEPA Instant Credit Transfer scheme should also become reachable in the TIPS service (TARGET Instant Payment Settlement).

The first Finnish banks joined the Eurosystem TIPS instant payment service at the end of 2021.

ECB Governing Council project seeks to establish a concrete form for a digital euro

The Governing Council of the ECB launched in 2021 a two-year investigation project, the purpose of which is to establish a concrete form for a digital euro, i.e. a central bank digital currency for the euro area.

A digital euro would complement the range of future payment instruments and would improve the operational reliability of the economy, as in contrast to the other electronic payment instruments, it would not be dependent on the systems of companies located outside the euro area.

Many open questions remain, however, on a digital euro and on how it would be implemented. Depending on the method of implementation, the impact of a digital euro on the economy and financial stability differs considerably.

The purpose of the investigation project is to determine how to achieve the largest possible benefits and the smallest possible risks for a digital euro.