Payment Systems

Payment Systems

A well-structured payment and settlement system promotes the efficient use of resources and contributes to the integration of financial markets. The Central Bank of Malta operates a payment system, known as TARGET2-Malta, which forms part of TARGET2.

The Central Bank of Malta also oversees and regulates the operation of, and the participation in, both domestic and cross-border payment and securities settlement systems. Approval must first be authorised by the Bank before new payment and securities settlement systems can operate. Furthermore, the Bank may also issue directives in respect of payment and securities settlement systems, cross-border credit transfer services and electronic payment services.

Interbank payment systems

The Central Bank of Malta operates TARGET2-Malta, which forms part of TARGET2, the European System of Central Banks’ (ESCB) Real-Time Gross Settlement (RTGS) system for the euro. MaRIS, the RTGS system for the Maltese lira, is no longer in operation.

Retail payment systems and services

Retail payments, including consumer and corporate payments, account for the bulk of payments in the economy. Within this landscape, the Bank is responsible for the coordination of the Single Euro Payments Area (SEPA) project, a self-regulatory initiative spearheaded by European commercial banks. The Bank has also been involved in the domestic introduction of the International Bank Account Number (IBAN), a set standard for bank account numbers that uniquely identify a customer’s bank account anywhere in the world. 

The Central Bank of Malta can also authorise the establishment of a bank clearing system and provides facilities for that system. The Bank is a member of the Malta Clearing House, also composed of a further nine credit institutions and two financial institutions.

Securities Settlement Systems

As part of the EuroSystem, the Central Bank of Malta is involved in the design and implementation of the Target2-Securities (T2S) project.

Regulation and Oversight

Article 34 of the Central Bank of Malta Act establishes the role of the Central Bank of Malta as a regulator and overseer of domestic payment systems. Payment systems include interbank and retail systems, as well as clearing, settlement, securities clearing, securities settlement, netting and similar systems. The Bank is also the regulator of payment services and payment instruments. Together with the ESCB, the Central Bank of Malta is responsible for ensuring the smooth operation of payment systems within the European Union.

Glossary of terms related to payment, clearing and settlement systems

The European Central Bank (ECB) has published a glossary of terms relating to the technical aspects of payment, clearing and settlement systems in the European Union. The glossary ensures consistency in terms used in publications issued within the ESCB. The glossary is available here.