From July 1, 2019, domestic banks in Hungary are required to be capable of executing instant transfers 24/7, completing transactions within 5 seconds. Moreover, they are allotted only 24 hours per year for system maintenance. While every bank claims readiness, behind the scenes some admit that delays or phased rollouts are possible.
What could this mean for our daily lives when transfers arrive not just during banking hours or within an hour—but every day, around the clock, in under 5 seconds?
For most transactions, nothing changes. Do we care whether Tesco merely receives a payment notification or the funds actually arrive instantly? Do we worry about whether merchants pay a 0 % or 3 % fee for instant availability?
However, in some particularly frustrating scenarios, the system could make a significant difference:
- If our irresponsible young child goes skiing in Slovakia for the weekend and calls home because they’ve run out of money, before they were somewhat helpless—but in future, even on a weekend or holiday, we could transfer money and have it in their account within 5 seconds.
- Returning home on Saturday from vacation to discover the electricity has been cut off due to missed payments—and knowing reconnection may take 24 hours—becomes more manageable if we can pay immediately on Saturday instead of waiting until Monday morning.
- When initiating a high-value transfer, such as a real estate deposit, there’s no need to wait around for an hour anymore—the purchase amount can be transferred in just 5 seconds.
- If we’ve bungled a car rental because the card we used lacks sufficient funds for the deposit, we can instantly transfer money to that card and continue without delay.
- If the hairdresser doesn’t accept cards and we have no cash, we can request a phone number or account, transfer money, and within 5 seconds they receive an SMS notifying them of the payment.
- Some more futuristic uses might seem unlikely—like using a smart device for instant cashier transfers instead of card contact—but in rare yet infuriating scenarios, the instant payment system (AFR) can be a real lifesaver.
The Giro believes in it.
But will it actually launch—or be delayed? That’s the million‑forint question. Names like AFR, AZUR, GiroPay, Giro Instant, ‘instant payment’, ‘instant transfer’—so many labels, but they all refer to the same system:
THE INSTANT PAYMENT SYSTEM IS COMING, AND IT SHOULD START ON JULY 1.
Hungarian banks must each implement roughly HUF 1 billion in upgrades, and most are in the final stages.
The Hungarian National Bank (MNB) and coordinating entity Giro Zrt. are highly committed—missing the planned rollout would be a prestige loss, and carry costs. Some state organizations and forward‑looking banks have already completed their tasks successfully.
The market sees this: the system has already entered individual bank testing. MNB’s Vice Governor Ferenc Gerhardt has overseen the process, receiving weekly updates from Giro; soon, Mihály Patai—who is moving to the central bank—may take over this key role.
The goal isn’t merely to enable instant transfers 24/7 under 5 seconds, but also to launch additional features: secondary identifiers (so transfers can be made using an email, tax number, or mobile number), and a payment request (“request to pay”) solution that could be more convenient and user-controlled than direct debits for utilities.
Who will benefit—and who might lose?
Winners likely include Hungarian bank customers and the banks themselves. Meanwhile, potential losers:
- Magyar Posta, if yellow slips decline,
- Card networks (Mastercard, Visa), if banks provide a viable alternative outside normal hours (though other countries show card use may not fall even when cheaper options emerge),
- Households holding cash—Hungary maintains an enormous HUF 5 000 billion in cash, which the MNB sees as excessive, even if often rational given withdrawal and transaction fees.
Differing levels of preparation
We asked banks about readiness, and bankers, vendors, and consultants expressed mixed signals. Banks with visibility across the market say a few foreign‑backed ones (K&H, Erste, CIB) are truly prepared, while some local banks are still behind—and two even raised the possibility of delays in industry meetings.
Every bank insists publicly that rumors of delay are malicious gossip and that the live launch will not fail. Yet the prepared banks are frustrated—successful launch depends on universal readiness. The unfair aspect: banks that invested heavily and completed projects may suffer if laggards cause problems, with no way to recoup the extra cost.
Security
Security is critical—under AFR, once a transfer is sent, there’s no time to cancel if it was fraudulent; funds can be instantly transferred again. Banks are preparing with additional systems and staffing to mitigate growing risks, though some abuse patterns will only be revealed in real usage.
Regulatory necessity, not business opportunity
Many see AFR as a major chance, enjoying the development; others view it as just obligatory compliance, unsure of its commercial return. The MNB treats instant transfers as the same product as existing ones, so banks can’t change fees for higher service quality. Still, improved payment culture and customer convenience are valuable—though banks don’t yet see if this investment will pay off soon or in the medium term.
Meanwhile, 80 % of financial transactions in Hungary remain in cash (by count), although transfers are higher in value terms.
Modernizing everyday life
The MNB hopes simple daily activities—like splitting a beer tab—will shift from cash/card to mobile transfers. Split transactions are common in the West; AFR could enable apps like that locally. Whether there’s a business model behind them is another question.
A challenge to card payments
In Europe, there’s a shift toward instant transfers rather than supporting card networks. Bank transfers may now truly compete with cards—under AFR, funds and margin move instantly to sellers, unlike card delays. The Erste sees AFR as a real long‑term competitor to card schemes and a driver of digital banking uptake.
Secondary IDs & payment requests
Secondary IDs—phone, email, tax ID—simplify transfers by removing the need to know exact account numbers. Budapest Bank sees this as AFR's most useful addition; K&H expects it to enable rapid, contactless transfer innovations. Payment request messages (“request to pay”) could replace yellow slips and direct debit with a more controlled, convenient system.
Useful, but risky
AFR may boost competition—e.g. mobile proxy IDs stay even if you change banks—but optional proxies leave loopholes. One source warned AFR carries strong fraud risk: imagine someone obtains 100,000 email addresses and sends low-value payment requests; even at 1% success, that’s HUF 5 million fraud. Although traceable, “homeless-account scams” present some challenge. Some security controls like notaries' accounts are more protected to prevent absurd transfers.
Will it launch?
Despite modernization efforts, some banks are in poor shape—one bank lacks capacity to coordinate with vendors; suppliers are contacting each other directly. One bank planned to help others but now lags badly. Another sees a justified delay of 6–9 months.
Implementing requires adapting all bank subsystems: accounting, settlement, GIRO, internet/mobile channels—project managers may juggle 10–15 vendors. Core system condition matters: MKB, with a recent digital transformation, expects below-average implementation costs. Takarék-csoport relies on Takarékinfo, ACI-based infrastructure, and partners including T‑Systems and Capsys, hoping for long‑term customer experience benefits.
OTP notes overlap of projects (AFR alongside PSD2) and tight deadlines, so banks implement them jointly. Both require substantial manpower and spending.
Suppliers are busy
Anyone knowing this field is swamped. Larger IT firms hunt teams; some banks do in‑house, but most hire external expertise—this isn’t cheap.
Time constraints
There’s very little time to complete developments, run multiple environments, test, and not rely on downtime windows. Only 24 hours per year are allowed for maintenance—unusual for banks used to regular outages for cards.
Starting with bugs and delays is risky in such a massive national‑scale project. Some professionals want delay or staged rollouts—allow those ready to receive immediately while giving others grace time to implement. A transitional phase—e.g. only transactions under HUF 10,000 being instant—could build confidence, though technically unnecessary. Most believe launch is still realistic.
Transparency
Crucially, clients need clarity and certainty about when changes occur, with a level playing field—no coexisting “instant users” and “old‑style users.”
Giro finalized the central system in January 2018 by partnering with Danish Nets, known for delivering early modules so banks have more prep time. According to current schedule: after central system and early voluntary bank tests, compulsory business testing runs from April 1 to May 31, 2019. CIB was among the first to join national testing; some tested as early as January 4, 2019—others didn’t volunteer for testing at all.
Author: Gergely Brückner
(Source: index.hu)
