Key Facts for Hungary
- Primary real-time rails: Hungary Instant Payments System, qvik.
- Typical settlement times: Payments settle in less than five seconds.
- Common limits: The per-transaction limit is 10 million forints; daily aggregate limits vary by institution.
What “real-time payments” means in Hungary
In Hungary, real-time payments are domestic transfers that clear in under five seconds, available 24/7/365. Launched in March 2020, the system covers transactions up to 10 million forints (about €25,000) and is mandatory for all banks, providing full national coverage from day one. It supports modern payment initiation methods like QR codes and payment requests. While a specific legal statute is not cited, the system's framework is defined by regulations from the Magyar Nemzeti Bank, particularly Decree No. 35/2017, which sets the rules for payment execution.
The system is regulated by the Magyar Nemzeti Bank (MNB), Hungary’s central bank, which mandated its creation and adoption. The central operator and clearing house is GIRO, which processes the country’s interbank transfers and underpins the real-time network. While no subsidiary clearing houses are involved, GIRO works with technology partners to run the infrastructure. The network was built with ISO 20022 messaging capabilities, aligning it with modern global payment communication standards.
Hungary’s decision to mandate universal bank participation from launch allowed it to avoid the fragmented rollouts seen in other countries, establishing a truly nationwide system instantly.
Payment Rail Overview
Hungary Instant Payments System
Launched in March 2020, the Hungary Instant Payments System is the foundational real-time network for the nation, also known as GIRO Instant Payments or AFR. It processes domestic forint transfers up to 10 million HUF in less than five seconds, operating around the clock. The system's mandatory adoption by all Hungarian banks from its inception created a unified, nationwide infrastructure for instant transactions.
- Real-time settlement: Transactions are fully cleared and settled in under five seconds, a dramatic acceleration from previous batch-based systems.
- 24/7/365 availability: The network operates continuously, allowing payments to be sent and received at any time, including nights, weekends, and holidays.
- Alias-based payments: Users can initiate payments using secondary identifiers like a mobile phone number or email address, removing the need to share complex IBANs.
- Nationwide coverage: A central bank mandate required all financial institutions to connect to the system at launch, guaranteeing universal access across the country.
- High transaction limit: The system supports individual transfers up to 10 million forints, accommodating a wide range of consumer and business payment needs.
Pros:
- Universal adoption and high transaction volumes were achieved almost immediately due to the mandatory rollout.
- The system’s speed and constant availability have made it a core part of daily economic life for both consumers and businesses.
- Modern features like alias payments offer a more intuitive user experience.
Cons:
- The system is restricted to domestic transfers within Hungary.
- It only supports transactions denominated in the Hungarian forint (HUF).
qvik
Introduced in September 2024, qvik is a payment service built upon Hungary's instant payment infrastructure to specifically target merchant transactions. It allows customers to pay instantly at points of sale or online using QR codes, NFC, or mobile app links. The Hungarian National Bank has mandated that commercial banks integrate qvik into their mobile apps, aiming to drive adoption for retail payments.
- Merchant-focused design: The service is built for retail environments, with funds arriving in the merchant's account in under five seconds.
- Multiple initiation methods: Payments can be made via QR codes, NFC taps, mobile app links, and payment request approvals, offering flexibility for different checkout scenarios.
- Interchange fee avoidance: Merchants using qvik can bypass the interchange fees typically charged for card transactions, directly reducing their payment processing costs.
- SoftPOS integration: Partner apps allow merchants to accept both instant payments and card transactions on a standard mobile phone, eliminating the need for dedicated POS hardware.
- Enhanced security: Customers approve payments directly in their banking app without entering card details or PINs online, reducing exposure to fraud.
Pros:
- Significantly reduces merchant settlement times and processing costs.
- Offers a secure and convenient payment experience for consumers.
- The SoftPOS capability lowers the barrier to entry for small businesses to accept digital payments.
Cons:
- Merchant-side availability was limited at launch, with only a few banks initially providing the service to businesses.
Limits, Fees, and SLAs
- Limits: The instant payment system has a per-transaction cap of 10 million forints. Daily limits are determined by individual financial institutions.
- Operating Hours: The system operates 24/7/365, including weekends and holidays, with no specified cut-off times for processing payments.
Compliance and Risk
KYC/KYB & AML
Hungary’s AML framework requires financial firms to perform strict customer due diligence, verifying identities when establishing relationships or for transactions over certain thresholds. Suspicious activities must be identified through ongoing monitoring and reported to the National Tax and Customs Administration.
Data Residency & Privacy
While specific data residency mandates are not prominent, firms operate under EU privacy standards. A key obligation is the long-term retention of customer and transaction records, which must be kept for a minimum of eight years following a relationship's conclusion.
Fraud Controls
Fraud prevention is built into the compliance framework, requiring customer screening against sanctions and PEP lists. Technical controls are also present in services like qvik, where users authorize payments in-app, reducing exposure of sensitive financial details during online transactions.
Recordkeeping & Audits
Financial regulations impose strict recordkeeping duties, requiring firms to maintain all customer and transaction data for at least eight years after a relationship ends. These records must be complete and readily available for inspection by regulatory authorities upon request.
Lightning Network Integration as a Solution
The Lightning Network is a second-layer protocol on Bitcoin that processes transactions off the main blockchain through a network of payment channels. This structure provides near-instant, low-cost payments. While domestic real-time payment systems are confined by national borders, the Lightning Network offers a global bridge. It can connect isolated domestic systems, creating a worldwide infrastructure for instant value transfer where local rails cannot operate, especially for international or cross-currency payments.
While both systems offer near-instant settlement, the Lightning Network’s transaction fees are typically fractions of a cent, making micropayments economically practical. The most significant distinction is reach; domestic rails are limited to a single country and currency, like Hungary’s forint-based system. The Lightning Network, however, operates as a borderless payment layer built on Bitcoin, accessible to anyone with an internet connection, providing a truly global scope for payments.
- Cross-border complexity: It bypasses traditional banking intermediaries, high fees, and currency conversion delays associated with international payments, offering a direct, global alternative to domestic-only systems.
- High transaction costs: By moving payments off-chain, it reduces fees dramatically, making micropayments for services like content streaming or gaming economically viable.
- Scalability limitations: The network can process millions of transactions per second, overcoming the throughput constraints of the main Bitcoin blockchain and supporting high-volume, global use.
Exploring the Lightning Network opens a path to a more connected and efficient global payment future.
B2B Enterprise Use Cases
- Supplier Payments – Businesses can pay international invoices instantly, bypassing correspondent banking delays and high wire transfer fees.
“Business value:” Drastically cuts cross-border payment friction and operational costs. - Merchant Settlement – Global online retailers can receive customer payments from anywhere in the world with immediate finality.
“Business value:” Provides instant access to working capital and simplifies global financial operations. - Treasury Optimization – Corporate treasurers can move capital between international accounts in real-time to manage liquidity across different regions.
“Business value:” Achieves 24/7 global cash management without waiting for traditional settlement windows. - Payroll – Companies can execute instant salary disbursements to a distributed global workforce, including freelancers and remote employees.
“Business value:” Delivers on-demand, low-cost payroll for a modern international team. - Machine-to-Machine (M2M) Payments – Autonomous devices, like electric vehicles or industrial sensors, can automatically pay for services as they are consumed.
“Business value:” Builds automated, pay-per-use economies for connected IoT infrastructure.
Cross-Border Transactions and Remittances to Hungary
Cross-border real-time payments are challenging because they require bridging separate domestic systems, each with unique rules and technologies. Reaching Hungary from outside the Eurozone means hitting the walls of traditional banking, marked by delays and high fees. For non-euro transactions, payments must follow complex FX paths through correspondent banks, adding friction and cost. This is a stark contrast to the country’s highly efficient domestic instant payment network, creating a major disconnect for international commerce.
- EU/EEA (SEPA Zone): This is the most common corridor for Hungarian businesses trading with partners in countries like Germany and France. SEPA payments are used for euro-denominated invoices and transfers, settling within one business day at a low cost.
- India: A key B2B corridor where businesses have historically used crypto for fast settlement. These payments now face significant regulatory friction due to Hungary’s new validation requirements for crypto-asset exchanges, adding complexity for international partners.
- United States: This corridor is important for personal remittances, with Hungarians working in the U.S. sending funds to family back home. These transfers often move through traditional wire services or modern fintech apps, which must bridge two very different banking and currency systems.
The Lightning Network provides a global overlay to connect disconnected domestic systems. By converting currencies to BTC for near-instant settlement and then converting back, it bypasses traditional banking delays and high FX fees, creating a faster, cheaper path for global payments.
How Lightspark Makes Integration Easy
Lightspark helps fintechs, digital banks, wallets, and exchanges integrate with the Lightning Network to offer global, real-time payments. We manage the operational complexities, including liquidity management, dynamic transaction routing, and built-in compliance screening, so you can focus on your core product. Our comprehensive developer tooling and APIs are designed for rapid implementation, allowing you to connect to a worldwide payment infrastructure with sub-second settlement globally. This provides a direct path to offering your customers faster, lower-cost international transactions without the friction of traditional systems. Ready to expand your payment capabilities? Talk to our team.
Sources and Further Reading
- https://www.lightspark.com/contact - Connect with the Lightspark team.
- https://www.lightspark.com/knowledge/how-the-lightning-network-is-transforming-bitcoin - Lightning Network's Bitcoin transformation explored.
- https://www.lightspark.com/knowledge/is-crypto-legal-in-hungary - Hungary's legal stance on crypto.
- https://www.lightspark.com/knowledge/what-does-the-lightning-network-do - Defining the Lightning Network's purpose.
- https://www.lightspark.com/news/insights/what-are-lightning-payments - An introduction to Lightning payments.
- https://www.mastercard.com/global/en/news-and-trends/Insights/2022/making-hungarys-payments-faster-and-more-secure.html - Securing and accelerating Hungary's payments.
- https://www.mnb.hu/en/payments/instantpayments - Hungary's official instant payment framework.
- https://www.transfi.com/blog/hungarys-payment-rails-how-they-work---giro-sepa-real-time-transfers - Explaining Hungary's payment rail system.
