Retail Payment System (RPS)

The Bundesbank is also active in retail payments and, using its RPS system, operates one important clearing institutions in the euro area. In contrast to individual payments, the Bundesbank aims only to play a complementary role in retail payments; this is reflected by the fact that RPS has a market share of under 15% in German payments. By its operational activity, the Bundesbank contributes to a high level of efficiency and security as well as short processing times in German payments. In addition to competitively neutral access for all credit institutions, it also provides nationwide availability in Germany owing to the fact that all credit institutions maintain an account with the Bundesbank.

RPS is a cost-effective system for settling non-urgent payments. RPS was introduced by the Bundesbank in the early 1970s. Its key feature is batch processing in the submission and delivery of payments. This is based essentially on the communication procedure of the Bundesbank’s Electronic Access. Since 9 January 2006, the Bundesbank has been offering access to SWIFTNet. Since 26 January 2009, the Bundesbank has also been supporting the Electronic Banking Internet Communication Standard (EBICS). Around 700 credit institutions and other Bundesbank account holders, such as public authorities, use RPS and submit about 9 million orders each day (equivalent to an amount of €8 billion), roughly 40% of which are credit transfer orders and around 60% collection orders (direct debits and converted cheques). Besides the reasonable transaction prices, the submitters also benefit from float-free settlement. The gross-settlement procedure used in RPS prevents the payment beneficiary from incurring any credit risk.

Since November 2003, the Bundesbank has been using its formerly national RPS clearing procedure for cross-border European payments, too (connection to the STEP2 procedure of the Euro Banking Association). This means that the Bundesbank provides German credit institutions – as it does nationally - with a neutral interface to overarching pan-European structures. The public authorities, in particular, are making extensive use of the RPS link to STEP2 to settle their cross-border euro retail payments throughout Europe.

In addition, the Bundesbank is a member of the European Automated Clearing House Association, EACHA, which, although originally established as an informal association, was formalised under Belgian law at the end of September 2006.

In the RPS procedure, the Bundesbank also works together with the banking industry. In this way, the procedure can be continuously optimised. Furthermore, as part of the development of a Single Euro Payments Area (SEPA) by taking account of the requirements arising from new SEPA payment instruments and pan-European standards, the Bundesbank intends to develop RPS into a modern, SEPA-compatible clearing procedure.

Further information on payment processing in RPS can be found on the following fact sheet.

• Fact sheet - Retail Payment System (RPS)