LUXEMBOURG

Source: IMF, International Financial Statistics, July 2021.

• Luxembourg's central bank is the Banque Centrale du Luxembourg (BCL – www.bcl.lu).
• The Banque Centrale du Luxembourg is a member of the European System of Central Banks (ESCB) and operates certain activities, such as issuing currency, under the authority of the European Central Bank (ECB – www.ecb.europa.eu).

Bank Supervision

• In November 2014, the ECB, via the Single Supervisory Mechanism (SSM), assumed responsibility for supervising the financial stability of banks operating within the euro zone. However, while the ECB has final supervisory authority over all banks operating within the euro zone, it will only directly supervise those banks classified as ‘significant’ under the terms of the SSM (115 significant banking groups have been recognized to date). ‘Less significant’ banks will continue to be supervised by the national supervisory authority, i.e. the Financial Sector Supervisory Authority (Commission de Surveillance du Secteur Financier (CSSF) – www.cssf.lu).

• Lifting fees are applied on payments between resident and non-resident accounts.

• Credit transfers are used by companies to pay salaries and suppliers, and to make tax and treasury payments. They are also used to make benefit payments and interbank payments.
• SEPA credit transfers can be settled via STEP2 or correspondent banking networks.
• Approximately 66 banks in Luxembourg participate in the SEPA credit transfer scheme.
• Banque Raiffeisen’s incoming and outgoing domestic and cross-border SCTs are processed by the Netherlands-registered company, Equens SE.
• High-value and urgent EUR-denominated domestic and cross-border (within the euro zone) credit transfers can be settled in real time via TARGET2-LU.
• High-value and urgent cross-border credit transfers can also be settled with end-of-day value via the Euro Banking Association's EURO1 system. Seven banks in Luxembourg participate directly in EURO1.
• Cross-border transfers can be made via SWIFT and settled through correspondent banks abroad and/or bank branch networks.
• In November 2017, the European Payment Council’s SCT Inst scheme (a pan-European 24/7 instant payment scheme for SEPA credit transfers) went live across all SEPA countries. The scheme enables the transfer of funds (the maximum threshold value for SCT Insts is EUR 100,000, as of July 2020) to another account in less than ten seconds. There are seven SCT Inst participants in Luxembourg at present.
• EBA Clearing and Italy’s SIA Group have developed and implemented a pan-European platform for instant EUR payments called RT1. It is fully compliant with the SCT Insts scheme and is in line with the ISO 20022 global messaging standards for instant payments.
• TIPS is a pan-European service for the settlement of instant payments in central bank money. The service enables payment service providers and ACHs with access to TARGET2 to offer fund transfers 24/7, 365 days a year. TIPS is aligned with SCT Insts. It is primarily focused on EUR payments but is technically capable of settling payments denominated in other currencies.

• Direct debits are used for regular payments, such as utility bills.
• SEPA CORE and B2B direct debit schemes can be settled on a same-day basis via STEP2. There are 30 Core SDD participants and 19 B2B SDD.
• Cross-border SEPA direct debits can be processed via STEP2 or Switzerland’s SIX Payment Services (which works together with the Swiss Euro Clearing Bank (SECB)).

• Cheques are rarely used in Luxembourg.
• Cheques are cleared and settled bilaterally between banks.

• Card payments are increasingly popular, especially for retail transactions.
• There were 1 million debit cards and 2.0 million credit cards in circulation at the end of 2019.
• Visa and MasterCard-branded payment cards are the most widely issued.
• American Express and Diners Club credit cards are also available.
• Card payments are settled via Switzerland’s SIX.
• Contactless card technology is available in Luxembourg.

• There were 595 ATMs in Luxembourg at the end of 2019.
• There were 16,740 EFTPOS terminals in Luxembourg at the end of 2019.
• All payments are settled via SIX.
• All ATMs and POS terminals are EMV-compliant.

• Paysafecard is an online pre-paid payment method. The paysafecard is credited using paysafecard PINs and is not linked to bank accounts. Customers can combine paysafecard PINs with an online account.
• The Digicash mobile payment app is offered by Luxembourg’s leading banks and used by over 25% of the population.

• BNP Paribas BGL's Global Trade Solutions (GTS) team comprises a local trade manager supported by a middle office team of 10 trade finance experts. In addition to the bank's integrated export and import offering (e.g. documentary credits, collections and international guarantees) supported by the bank's global processing platforms, GTS also provides corporate clients with innovative supply chain management solutions.

• The EU has trade agreements in place with over 30 countries.
• The EU is currently in free trade negotiations with a number of countries, including the Association of Southeast Asian Nations (ASEAN), Australia, Indonesia, Mercosur (the Southern Common Market), Uruguay and the USA.
• The EU-UK Trade and Cooperation Agreement came into force on 1 May 2021.

Source: IMF, International Financial Statistics, July 2021.