Croatia is among the recent entrants to the real-time payments space with the launch of NKSInst in October 2020. Continuous developments, such as the launch of a proxy lookup service in March 2021 and increased participation from banks, will support the growth of real-time payments over the next few years. Between 2021 and 2026, real-time payment transactions are anticipated to grow at a CAGR of 83.7%, by which time they are expected to amount to 16% of all electronic payments. The accelerated shift towards electronic payments amid the COVID-19 pandemic will also contribute to the growth.
Real-Time Payment Types
Year of Real-Time
Croatia’s population of just four million makes it difficult to achieve the critical mass needed to justify further investments in real-time payment services. Nevertheless, the building blocks are in place for wider adoption than we see today. There is a relatively large banking sector, connected to TIPS, and a national real-time payments scheme in place, NKSInst, which is authorized (though not mandated) by the Croatian National Bank and based on SCT Inst. This allows for instant local currency transfers when both parties hold accounts at any of the participating banks.
Because of the lack of critical mass noted earlier, financial institutions tend to build and maintain their own payments infrastructure, often making tactical investments in multiple add-ons with a careful eye on cost containment. As a result, what has developed to date is a real-time payments ecosystem of bits and pieces. Proxy look-up is in place, but digital wallets — popular elsewhere in Europe, and a relatively low-cost investment — are not being taken up by any of the players.
The situation is best described, then, as one in which all the players are satisfied with the state of things as they are. Major short-term developments in the domestic market are therefore unlikely, but change could occur in the area of cross-border payments. Because NKSInst is based on SCT Inst, it would only take a marginal investment to access other clearing and settlement mechanisms in Europe based on SCT Inst. In due course, all banks will be connected to the NKSInst, at which point a comprehensive offering that serviced both domestic and crossborder needs would be a significant opportunity for banks to expand and deepen customer relationships. To better monetize those relationships, however, banks will need to put aside the tactical approach in favor of more strategic infrastructure roadmaps. Key criteria will be the ability to efficiently service today’s payment needs while quickly, and cost-effectively onboarding new payment types in the future.
Real-Time Total Participants
Population Banking Level
Number of debit, credit and
charge cards per adult
Index to global average
F5 Yr CAGR
Shares of Volumes by Payments Instrument
- Paper-based payments
- Electronic payments
- Real-time payments
Real-Time Payments Volume and Its Share in Overall Non-Paper-Based Transactions, 2015-26f
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