Payment systems

Published: 31/1/2015 Modified: 1/1/2023
Payment systems are funds transfer systems with formal and standardised arrangements and common rules for the processing, clearing and/or settlement of payment transactions. Payment operations in the Republic of Croatia are carried out through three payment systems: TARGET2, EuroNCS and EuroNKSInst.

TARGET2 (Trans-European Automated Real-time Gross settlement Express Transfer system) is a payment system for the settlement of payment transactions in euro in real time on a gross basis. The TARGET2-HR national component started production operations on 1 February 2016 in accordance with the National SEPA Migration Plan, the Single Euro Payments Area.

TARGET2 is a centralised system that offers the same level of service to all its participants, which in terms of its legal structure, consists of several payment systems, TARGET2 national components. Each Eurosystem central bank operates its own TARGET component system.

After the introduction of the euro as the national currency in the Republic of Croatia (RC), TARGET2-HR is the payments infrastructure that has enabled complete migration of the Croatian Large Value Payment System (CLVPS) to the TARGET2 platform in euro.

EuroNCS (Euro National Clearing System) is a system that executes the clearing of interbank SEPA credit transfer (SCT) and SEPA direct debit (SDD) payment transactions.

The EuroNCS payment system became operational on 6 June 2016 in accordance with the National SEPA Migration Plan and, until the introduction of the euro, it only processed interbank euro payments of national and cross-border SEPA credit transfers in euro.

With the introduction of the euro in the RH, the necessary adaptation of the EuroNCS system for the clearing of SEPA direct debits (SDD) was carried out. This has enabled the migration of the entire kuna payment operations that used to be cleared in the National Clearing System (NCS) payment system to the EuroNCS system. 

The EuroNCS payment system is interoperable with retail payment systems of other member states, for the clearing of both national and cross-border SEPA credit transfers (SCT) and SEPA direct debits (SDD) and it enables a full SEPA availability for all its participants.   

EuroNCSInst is a payment system for the execution of payment transactions between the payer and the payee, in almost real time, in only a few seconds (SEPA instant credit transfer – SCTInst).

Within this time frame, the payer's IBAN account is debited, the interbank clearing of the initiated instant payment transaction is executed and the IBAN account of the payee is credited.

With the introduction of the euro as the national currency in the RC, the NCSInst payment system for the execution of instant payment transactions in kuna, which became operational in October 2021, is transformed into the EuroNKSInst system for the clearing and settlement of instant payment transactions in euro.

With the introduction of the euro in the RC, the first stage of the adaptation of the EuroNKSInst payment system that currently only enables the execution of instant payment transactions in euro for national payments has been completed.