16.07.2014

Latvian Association of Commercial Banks: Automatic Payments to Change starting from next year

Starting from 1 January 2015, changes will apply to the services of direct debit or automatic payments – the existing services will be replaced by new solutions that will provide the bank customers with a service of equal convenience and functionality. Companies which provided their customers the option of automatic payments in co-operation with banks and intend to do so also in the future must contact their bank or the operator of billing infrastructure in advance to discuss the details and introduce the required changes to their IT systems.

Following the integration into the Euro area, the payments in Latvia must comply with the requirements effective in the Single Euro Payments Area (SEPA). Therefore, as of 1 January 2015 the existing automatic payment services, which are currently performed by the means of direct debit payments, will have to be replaced by solutions that comply with the SEPA requirements.

To provide companies and individual customers with an accustomed and simple service, the banks in cooperation with companies servicing a large number of customers and operators of billing infrastructure selected by banks and companies - have developed a solution that will allow the bank customers to continue making regular payments from their accounts.

According to the current procedure, the payer agrees that money is drawn from his/her account based on a request by a particular service provider. However, starting from 1 January 2015 a company will send a bill to the customer's bank and the customer will instruct the bank to prepare and execute a transaction on his/her behalf to settle the bill; the customer him/herself will be the initiator of the payment of a bill.

Companies, which are currently offering the option of automatic payment and intend to keep this option, must contact their infrastructure provider and/or bank to choose the most convenient solution and introduce the required changes to their information system.

The bank customers will receive detailed information from their banks about the planned changes in this service.