The European Central Bank (ECB) has introduced an advanced pan-European service to immediately settle electronic payments.
ECB has implemented Target instant payment settlement (TIPS), which uses central bank money to settle payments individually within 10 seconds.
Under first transaction, the client from the Spain’s CaixaBank has used TIPS to make an instant payment to a client of the French bank Natixis,
Abanca Corporación Bancaria, Banco Bilbao Vizcaya Argentaria, Banco de Crédito Social Cooperativo, Berlin Hyp, Caja Laboral Popular Cooperativa de Crédito and Teambank have also joined the TIPS service.
The account holders will not have any entry or maintenance fees, which operate under the principle of full cost recovery.
According to ECB, the price per initiated transaction is set at €0.002 for the first two years of operation and the charges have been exempted for the first ten million payments settled on each TIPS account by the end of 2019.
The banks from Europe, which have already connected to TIPS, can now follow the lead of France, Germany and Spain by linking to the platform. They can also develop user-friendly solutions to make instant payments by appealing to both retailers and consumers.
The ECB is the central bank of the 19 European Union countries, which have accepted the Euro. The ECB is an official EU institution of the Eurosystem, as well as the single supervisory mechanism for banking supervision.
The ECB is responsible for the prudential supervision of credit institutions located in the euro area and participating non-euro area member states.
The Eurosystem, which includes ECB and the national central banks of the euro area, conducts multiple tasks to maintain price stability.
The Eurosystem takes responsibility for defining and implementing monetary policy, conducting foreign exchange operations, holding and managing the euro area’s foreign currency reserves, as well as promotes the smooth operation of payment systems.
The ECB conducts specific tasks in the areas of banking supervision, banknotes, statistics, macroprudential policy and financial stability, as well as international and European cooperation.