Key Facts for Georgia
- Primary real-time rails: Instant Payment System (IPS).
- Typical settlement times: Funds are available immediately.
- Common limits: Varies by institution.
What “real-time payments” means in Georgia
In Georgia, real-time payments are defined by the country’s Instant Payment System (IPS), an electronic retail solution operating 24/7 that makes funds immediately available to recipients. The system is introduced by the National Bank of Georgia and its scope includes all commercial banks and non-bank payment service providers, serving both individuals and businesses. Customers can initiate payments through various channels, including mobile apps and QR codes. While a specific statute is not yet defined, the legal framework is being aligned with the EU’s Payment Services Directive 2 (PSD2), providing a modern regulatory foundation (industry norm).
The National Bank of Georgia (NBG) is the lead regulator and operator, developing the IPS in partnership with the World Bank. No subsidiary clearing houses are specified, as the central bank typically operates the core infrastructure directly (industry norm). The system is being built for compatibility with SEPA schemes, which points to its use of the ISO 20022 messaging standard for rich payment data. This approach prepares the system for straightforward integration with European payment networks upon Georgia joining the SEPA zone.
By developing a modern, SEPA-compatible system, Georgia joins a global movement of nations upgrading their payment infrastructures for a digital-first economy.
Payment Rail Overview
Instant Payment System (IPS)
The Instant Payment System is Georgia's national electronic payment solution, designed to process transactions in Georgian Lari (GEL) instantly. Operating 24/7, it ensures funds are immediately credited to the recipient's account upon execution. The system, developed by the National Bank of Georgia in partnership with the World Bank, is scheduled to launch in the second half of 2026.
- 24/7/365 Availability: The system operates around the clock, including weekends and holidays, for continuous payment processing.
- Immediate Fund Settlement: Recipients gain access to transferred funds instantly, a core feature of the new payment infrastructure.
- Multi-channel Access: Users can initiate payments through various points, including bank branches, internet banking, mobile applications, and QR codes.
- Open Banking Foundation: The system is structured to support innovative financial services from third-party fintech companies.
- SEPA Compatibility: It is built on international standards for future integration with the Single Euro Payments Area, which will connect it with European payment networks.
Pros:
- Lowers transaction costs, particularly for small businesses.
- Introduces greater competition and a wider range of services in the payments sector.
- Improves the efficiency of cross-border remittances.
Cons:
- The system is not yet operational to the public.
- Its success will hinge on building public trust and overcoming low financial literacy in some areas.
Limits, Fees, and SLAs
- R2P Fees: The system is designed for low transaction costs, though specific charges for request-to-pay services are not yet detailed.
- Operating Hours: The Instant Payment System is available 24/7/365, with no specified cut-off times for processing transactions.
Compliance and Risk
KYC/KYB & AML
Georgia's framework, particularly for Virtual Asset Service Providers, mandates registration with the National Bank of Georgia. Firms must implement robust AML/KYC programs, including customer identification, transaction monitoring, and reporting suspicious activity to the Financial Monitoring Service, aligning with international standards.
Data Residency & Privacy
While specific data residency mandates are not detailed, regulations impose strict confidentiality on financial reporting. Firms are prohibited from alerting customers to investigations and must maintain detailed transaction and identification records for at least five years to support regulatory oversight.
Fraud Controls
Fraud prevention is integrated into the AML compliance framework. This involves continuous monitoring of customer transactions to detect unusual patterns, mandatory reporting of suspicious activity to authorities, and a strict prohibition on anonymous or fictitious accounts to reduce illicit financial activities.
Recordkeeping & Audits
Regulations mandate that firms maintain detailed records of all customer identification data and transaction information for a minimum of five years. Companies must also implement formal internal compliance systems, which are subject to independent audits to verify adherence to financial regulations.
Lightning Network Integration as a Solution
The Lightning Network is a second-layer protocol built on Bitcoin, creating off-chain payment channels for rapid, low-cost transactions. While local RTP rails modernize domestic payments, they are confined by national borders. The Lightning Network complements these systems by offering a global, interoperable payment layer that connects economies without depending on traditional banking infrastructure, filling a critical gap for international transactions.
Both systems provide near-instant settlement and minimal fees, but their fundamental difference is reach. Domestic rails like Georgia’s IPS operate within a single country. In contrast, the Lightning Network is inherently borderless, facilitating payments for anyone with an internet connection. This global accessibility makes it a powerful instrument for international commerce and remittances, moving far beyond the geographic constraints of national payment systems.
- Cross-Border Complexity: It bypasses traditional banking intermediaries for international transfers, dramatically reducing costs and settlement times.
- Scalability Limits: By processing transactions off-chain, it supports a massive volume of payments without congesting the main Bitcoin blockchain.
- Micropayment Infeasibility: Its extremely low fees, often fractions of a cent, make small, frequent payments for things like content streaming or tipping economically practical.
Exploring the Lightning Network opens a new frontier for global, instantaneous value exchange.
B2B Enterprise Use Cases
- Supplier Payments – Businesses send instant cross-border payments to global suppliers, settling invoices in seconds instead of days. Business value: Improves supply chain liquidity and removes payment friction.
- Merchant Settlement – Retailers receive final payment from customers immediately, bypassing card network delays and batch processing. Business value: Eradicates chargeback risk and lowers transaction costs for higher profit margins.
- Treasury Optimization – Corporate treasuries move capital between international accounts 24/7, avoiding bank holidays and wire transfer fees. Business value: Achieves around-the-clock global liquidity and reduces idle cash.
- Global Payroll – Companies pay international employees and freelancers instantly, with funds arriving directly in their digital wallets. Business value: Simplifies multi-currency payroll and gives workers immediate access to their wages.
- Machine-to-Machine Payments – Autonomous devices transact directly with each other, such as an electric vehicle paying a charging station. Business value: Creates an economic foundation for automated, machine-driven services.
Cross-Border Transactions and Remittances to Georgia
Cross-border real-time payments are complex due to fragmented regulatory landscapes and compliance friction. Reaching a market like Georgia requires bridging disparate payment rails—connecting its domestic IPS to global systems. This involves navigating specific FX paths for currency conversion and overcoming operational bottlenecks from strict AML/KYC rules. These challenges often lead to transaction delays and higher costs, hindering the flow of capital across borders and complicating what should be a straightforward process of moving money.
- Russia: Remittances from a large Georgian diaspora have historically been a major source of inbound capital. These transactions now face significant compliance hurdles, requiring meticulous documentation and monitoring to navigate the complex financial oversight governing this corridor.
- European Union: As Georgia aligns with EU standards, this corridor is growing in importance for both trade and personal remittances. The country's planned integration with SEPA will standardize these payments, making them as fast and inexpensive as domestic transfers within the Eurozone.
- Türkiye and Azerbaijan: These neighboring countries form a critical trade artery, with payments facilitating the movement of goods along the Middle Corridor. Cross-border transactions support this regional economic activity, complemented by remittances from workers and family members across the borders.
The Lightning Network provides a direct path for global payments, bypassing slow correspondent banking systems. By settling transactions instantly over a decentralized network, it cuts both the high fees and multi-day delays of international wires, creating a more efficient financial layer.
How Lightspark Makes Integration Easy
Lightspark helps fintechs, digital banks, wallets, and exchanges connect to the Lightning Network for global, real-time payments. We abstract away the operational complexities by managing node infrastructure, liquidity, and optimized routing. Our platform provides comprehensive developer tooling and built-in compliance screening to simplify market entry and scaling. With our infrastructure, you can provide your customers with sub-second settlement globally for cross-border transactions at a fraction of the cost of traditional rails. Ready to build the future of payments? Talk to our team.
Sources and Further Reading
https://interfax.com/newsroom/top-stories/110659/- Georgia's plan for SEPA integration.https://www.lightspark.com/contact- Connect with the Lightspark team.https://www.lightspark.com/knowledge/how-the-lightning-network-is-transforming-bitcoin- How Lightning transforms Bitcoin payments.https://www.lightspark.com/knowledge/is-crypto-legal-in-georgia- Georgia's cryptocurrency legal framework overview.https://www.lightspark.com/news/insights/what-are-lightning-payments- An introduction to Lightning payments.https://nbg.gov.ge/en/page/project- Georgia's Instant Payment System details.https://www.worldbank.org/en/country/georgia/overview- World Bank's economic overview: Georgia.https://www.worldbank.org/en/news/feature/2023/10/02/digital-payments-in-georgia-bolstering-the-regulatory-environment-and-developing-infrastructure-for-an-inclusive-future- Developing Georgia's digital payment infrastructure.
