How does STEP1 work?
STEP1 is a same-day single payment service and processes retail payment orders and bank-to-bank transfers related to such commercial transactions.
A STEP1 Bank’s position resulting from processed payment messages can never be negative, i.e. STEP1 Banks effectively have a zero debit cap. STEP1 Banks settle their daily balances via a EURO1 Bank of their choice, which acts as their settlement bank, providing liquidity against the potential net balance but never seeing the individual payments constituting these balances.
Cut-off time and processing cycle
Payments exchanged in STEP1 are for amounts that do not create the need for systemic risk protection. If a single STEP1 message exceeds the limit per transaction of either the sending bank or the receiving bank, it is rejected by the system. The minimum limit is EUR 2 million and the maximum limit is EUR 50 million. Any payment that does not exceed this amount but would result in a limit breach due to the current balance of the sender and/or receiver banks is put in an on-hold queue. This queue is continuously revisited during the opening hours of the service. Depending on the bilateral agreement between a STEP1 Bank and its settlement bank, the liquidity required to ensure the processing of on-hold payments can be injected into STEP1 intra-day whenever necessary.