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TARGET instant payment settlement

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TIPS (TARGET Instant Payment Settlement) is the pan-European instant payment settlement service in central bank money for the Eurozone. According to the Euro Retail Payments Board (ERPB) instant payments are "electronic retail payment solutions available 24/7/365 and resulting in the immediate or close-to-immediate interbank clearing of the transaction and crediting of the payee’s account with confirmation to the payer (within seconds of payment initiation).".[1]

The Eurosystem’s market infrastructure is evolving and many initiatives are ongoing to promote efficiency, innovation and integration in financial markets in Europe. Four initiatives are currently under investigation or development: TARGET Instant Payment Settlement (TIPS), Consolidation of TARGET2 and Target 2 securities, Eurosystem collateral management system and a study of distributed ledger technology.[2]

The TIPS initiative[edit]

In Europe a corner stone in European payment has been the go-live of RT1 instant payment system for pan-European credit transfer which is based on the SCTinst scheme on 21 November 2017.[3] This standard was published by the European Payments Council (EPC) and it is used by payment service providers (PSP) and automated clearing houses (ACH). At the end of 2017 citizens from eight European countries have been able to use SCTInst compliant instant payment solutions for their business. To facilitate further integration of the European market the Eurosystem decided to develop an instant payments settlement system in central bank money: the Target Instant Payment Settlement (TIPS).[4] [5] [6]

TIPS infrastructure will be developed using the more recent technical solution and the application will be scalable enough to support high volumes of instant payments, in fact a maximum average of 500 transactions per second (TPS) will be supported. Time constraint are a crucial part of the payment process, so TIPS will complete settlement within 5 seconds for the large majority (99%) of transactions. High availability (24/7/365) will be achieved through a redundant architecture which will be able to match advanced disaster recovery objectives: the recovery time objective is 15 minutes. TIPS will rely on standard protocols like the ISO 20022 for messaging and SCTInst for the payment schema, and will be “neutral” from network point of view: each customer can decide from a pool of qualified network partners [7] wich use to connect to the TIPS platform.

From liquidity management perspective all the TIPS participants will benefit from central bank money settlement, so each of them can use TARGET2 to provide liquidity to their cash account. TIPS is part of the Eurosystem’s payment and settlement service portfolio, wich currently include TARGET2 and TARGET2 Securities. It will have the same business date as TARGET2. Furthermore, the TIPS account balances could be considered by bank for they reserve computations toward the ECB.

TIPS Objectives[edit]

The TIPS objectives are to:[8][9]

  • promote efficiency in the pan-European instant payment landscape;
  • promote market integration in the settlement of instant payments;
  • encourage European retail payments consolidation and reducing the risk of market fragmentation.

TIPS principles[edit]

The TIPS platform will have the same participation criteria as for TARGET2 and Instant payments will be settled in EURO Central Bank Money, like in TARGET2 TIPS will be also capable in the future of settling non Euro currencies.[8] The main difference to traditional RTGS systems is that TIPS will have 24/7/365 operating hours, so it will never stop during the year and the settlement will be performed almost instantaneously. To improve the standardization of pan-European payment system TIPS will support ISO 20022 standard and the SCTInst scheme. Like the other payment and settlement services developed by the Eurosystem TIPS will be operated on a full cost-recovery basis.

Transaction and information flow[edit]

Instant payment flow

The instant payment message flow can be summarized in the following six steps:[8]

1) A participant sends an payment transaction message to TIPS (compliant with the SCTinst scheme);

2) TIPS validates and reserves the amount to be transferred (this operation is known as conditional settlement);

3) The payment transaction is forwarded for acceptance to a receiving participant;

4) The receiving participant sends a positive reply message to TIPS;

5) The settlemet is performed in the platform;

6) A confirmation message is sent to the sending and receiving participants.


For (at least) the first two years of operation of TIPS the maximum price of a transaction will be €0.20.[8]


The TIPS is a 24/7/365 system, settlement in central bank money will be available 99.9% of the expected uptime (each quart).[8]


The Eurosystem started in September 2016 the investigation phase for a new istant payment system for the Eurozone.

In January 2017 the ECB sent to the market the first version of the User Requirements Document (URD), then after 7 weeks of consultation with the market the URD was consolidated.

In June 2017 the Governing Council decided to develop the service based on the results of the Investigation phase.[10]

In June 2018 SIA was the first network provider certified by ECB to offer the TIPS service in the Eurozone. [11]

Then in August 2018 the second network provider, SWIFT passed the compliance checks and was certified to connectivity to TIPS from go-live using SWIFTNet Instant service.[12]

TIPS is expected to go-live in November 2018 after a period of testing and pilot phase which will involve the final users.

See also[edit]

  • TARGET2 Securities
  • Single Euro Payments Area
  • SIA_S.p.A.
  • European Central Bank
  • EBA Clearing

External links[edit]


  1. "Instant payments definition on ECB website", Frankfurt 2015. Retrieved on 24 February 2018.
  2. "ECB Ongoing initiatives on ECB website"", , Frankfurt 2018. Retrieved on 3 March 2018.
  3. "Successful go-live for EBA CLEARING's instant payment system RT1 on EBA Clearing website". Retrieved on 21 November 2017.
  4. "European Central Bank to launch instant money transfer network", International business Times, London 22 June 2017. Retrieved on 7 May 2018.
  5. "ECB sets up instant payment service for eurozone businesses and customers", Financial Times, London 22 June 2017. Retrieved on 7 May 2018.
  6. "The Eurozone is upgrading to instant payments", Business Insider, London 5 July 2017. Retrieved on 7 May 2018.
  7. "Connectivity - technical requirements", ECB, Frankfurt 21 April 2017. Retrieved on 25 February 2018.
  8. 8.0 8.1 8.2 8.3 8.4 "TARGET Instant Payments Settlement - (TIPS)", ECB, Frankfurt 9 February 2017. Retrieved on 26 February 2018
  9. "All about TARGET Instant Payment Settlement (TIPS): a new actor in the European payments landscape as from November 2018", European Payment Council, Frankfurt 2 November 2017. Retrieved on 7 May 2018
  10. "The Govering Council decision to launch of a Eurosystem TARGET Instant Payment Settlement project", ECB, Frankfurt 23 June 2017. Retrieved on 24 February 2018.
  11. "SIA the first Network Provider Certified for instant payments of the ECB and Eurozone central banks", SIA S.p.A., Milan 11 June 2018. Retrieved on 23 August 2018.
  12. "SWIFT certified to provide access to Eurosystem’s TIPS", SWIFT, Brussels 7 August 2018. Retrieved on 23 August 2018.

TIPS - added third party reference[edit]

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