30 November 2018

ECB goes live with pan-European instant payments

The European Central Bank (ECB) has launched an innovative pan-European service for settling electronic payments instantly. TARGET instant payment settlement (TIPS) uses central bank money to settle payments individually in less than 10 seconds.

TIPS went live on 30 November 2018. The first transaction took place immediately, when a client of the Spanish bank, CaixaBank, used TIPS to make an instant payment to a client of the French bank, Natixis. Together with Abanca Corporación Bancaria, Banco Bilbao Vizcaya Argentaria, Banco de Crédito Social Cooperativo, Berlin Hyp, Caja Laboral Popular Cooperativa de Crédito and Teambank, they are the first banks to join TIPS.

The new service is offered at an attractive price. Operating under the principle of full cost recovery, TIPS has no entry or maintenance fees for account holders. The price per initiated transaction is set at €0.002 for the first two years of operation, with no charges for the first ten million payments settled on each TIPS account by the end of 2019.

Banks across Europe can now follow the lead of France, Germany and Spain, which have already connected to TIPS, by linking to the platform and developing user-friendly solutions that support the take-up of instant payments by appealing to both retailers and consumers.

Press release

Related speech by Yves Mersch: TIPS and the future of innovative retail payment solutions in Europe

Since the launch of the euro in 1999, the Eurosystem has greatly contributed to reshaping the European market infrastructure.

The Eurosystem's first step was to integrate and consolidate large-value payments. The first-generation TARGET2 Securities harmonised post-trading services for financial instruments, bringing an end to complex cross-border settlement procedures and the problems caused by different settlement practices across countries.

In launching TIPS, the Eurosystem is acknowledging the changing reality that digitalisation is erasing the borders between wholesale and retail. TIPS enables payment service providers to allow their customers to transfer funds across Europe in real time and around the clock, every day of the year.

Work on developing and implementing TIPS started in June 2017 and the project was completed on time, on schedule and on scope.

With the launch of TIPS, the Eurosystem has laid the groundwork for innovative, customer-friendly retail payment solutions for the benefit of European citizens. European payment service providers must make use of the opportunities offered by Europe's state-of-the-art market infrastructure rather than leaving the field to international players.

This has nothing to do with protectionism. On the contrary, as long as they fulfil the regulatory requirements, we remain open to global players. But we need to address the reasons for the scarcity of major European players in the payments market. If there is a lack of investment capacity for overhauling internal legacy systems that do not seamlessly function in a real-time payments era, we should not shy away from pooling resources and volumes and creating bigger players. Focusing on national markets alone would be a step backward. We have to think global and seek to develop global solutions that are based on European open governance and use European infrastructure.

 

Full speech

© ECB - European Central Bank