Cashless payments In cashless payments, the Bundesbank fulfils its statutory mandate to provide for the smooth settlement of payments in Germany and abroad. To this end, it also operates its own payment systems. Urgent individual intrabank payments and the monetary policy operations of the central banks require fast and secure payment systems. The Bundesbank has set the standard in this area. Together with two other Eurosystem central banks, it developed the Europe-wide TARGET 2 system, which has, since November 2007, been jointly operated by the three banks. Unlike its predecessor, TARGET 1, the system no longer constitutes various real-time settlement systems, but is instead based on a single technical platform. It not only allows banks to make payments in real time, but also helps them to save liquidity, for example, by enabling them to use counter-payments as cover.

For the most part, banks execute non time-critical payments from their customers to other credit institutions on a bilateral basis or via systems operated by banking groups. The Bundesbank also offers an additional system for cross-bank payments to all banks and thus on a competitively neutral basis in the shape of its Retail Payment System (RPS).

On 28 January 2008, the Single Euro Payments Area (SEPA) was launched in Europe with the SEPA credit transfer. Gradually, this should allow all euro payments in the SEPA to be settled using the new pan-European instruments SEPA credit transfers, direct debits and card payments as easily, efficiently and securely as domestic payments today. The Bundesbank supports SEPA, acts as the link between the German banking industry and the Eurosystem and has adjusted its own payment systems to meet the requirements of the SEPA.

 

Cash management In order to maintain confidence in the euro, our currency, it is also important that there is an adequate supply of high-quality cash at all times. To achieve this, counterfeit money as well as damaged or worn coins and banknotes must be removed from circulation. These are sovereign Bundesbank tasks in the core business area of cash management. While the Bundesbank aims to achieve increased privatisation in the field of cash handling, it must, in order to ensure the long-term quality and security of the cash supply in emergencies and crises ie in the event that larger cash handling firms cannot operate owing to strikes or insolvency retain a sufficient level of involvement in the cash cycle and in banknote processing.