The European Central Bank (ECB) has announced its plans for a new instant payments and settlement system that will enable businesses and consumers to send money in real-time across 19 countries.
According to IBS Intelligence, the TARGET Instant Payments Settlement Service (TIPS) will go live in November 2018 and take settlement and clearing houses out of the payments structure altogether. The ECB stated that TIPS, which will exclusively use the Euro for now, “shall serve as a technical solution for providing instant payments settlement services to participants without the provision of clearing services.”
While collaboration with banks is in the cards, participation will not be mandatory. The ECB stated that TIPS will be run on a not-for-profit basis, but there will be a fee of 0.2 cents per payment for the first two years of operation.
“TIPS shall be open to participation from PSPs and ACHs,” said the ECB. All participants will have “equal access conditions” to TIPS and the ECB will operate a non-discriminatory model. Additionally, access can be restricted on regulatory or legal grounds.
While many Euro countries have instant payments systems, such as the Istituto Centrale delle Banche Popolari Italiane in Italy and the Banco de España in Spain, the ECB wants to produce a bloc-wide operation in which responsibility for the development and running of the system is shouldered entirely by the Eurosystem.
TIPS is built on current International Organization for Standardization (ISO) messaging standards and will be aligned with the SEPA instant credit transfer (SCT Inst) scheme to “allow [for] easy transition.” The ECB has not ruled out switching standards as new ones are developed.