Definition
TIPS (TARGET Instant Payment Settlement) is the platform that settles instant payments in central bank money, operated by the ECB since November 2018.
It is the reference infrastructure for settling SCT Inst payments between euro-area PSPs, 24/7/365, in a matter of seconds and with no counterparty risk (the liquidity used is central bank money). TIPS is one of the Eurosystem's three TARGET platforms, alongside T2 (large-value payments) and T2S (securities). It coexists with RT1 (EBA Clearing), and the two are interoperable.
How it works
Guaranteed timing: under 10 seconds end-to-end (the ECB target), often under 5 in practice.
Technical characteristics
- Standard: ISO 20022 (
pacs.008,pacs.002,pacs.004). - Availability: 24/7/365.
- Currencies: EUR (since 2018), SEK (2024), DKK (2025).
- Cap: none imposed by TIPS; the limit is set by the SCT Inst scheme (€100,000 by default).
- Liquidity: one technical account per participant, funded from T2 during business hours.
- Transaction-by-transaction settlement, with no batching.
TIPS vs RT1
| Aspect | TIPS (ECB) | RT1 (EBA Clearing) |
|---|---|---|
| Operator | ECB | EBA Clearing (private) |
| Liquidity | Central bank money | Common commercial bank money |
| Availability | 24/7 | 24/7 |
| Cap | €100k (configurable) | €100k (configurable) |
| Risk | None (ECB) | Low (EBA mechanisms) |
The two coexist and are interoperable: the end user receives a standard SCT Inst regardless of which rail is used.
TIPS vs FedNow vs Pix vs UPI
| System | Region | Operator | Launch | Volume |
|---|---|---|---|---|
| TIPS + RT1 | Euro area | ECB + EBA Clearing | 2018 + 2017 | growing fast |
| FedNow | US | Fed | 2023 | ramping up |
| Pix | Brazil | BCB | 2020 | ~6bn tx/month |
| UPI | India | NPCI | 2016 | ~17bn tx/month |
The EU still lags on volume adoption despite a mature infrastructure — which is exactly what the IPR addresses by making SCT Inst mandatory and priced like a regular SCT by October 2025.
The IPR and its link to TIPS
The IPR (EU 2024/886) requires every euro-area PSP to offer SCT Inst (first receiving, then sending) at a cost no higher than a regular SCT, with mandatory VoP and daily sanctions screening. The consequence: an expected surge in volumes on TIPS and RT1 after October 2025.
What TIPS is not
- Not a wallet: it is interbank infrastructure, invisible to the general public.
- Not a scheme: it is the settlement rail, the scheme being SCT Inst (EPC).
- Not a payment service: no direct customer API, access is via PSPs.
- Not universal: EUR, SEK and DKK only — for USD it's FedNow and RTP.
- Not mandatory for SCT Inst: a PSP can route through RT1 instead.
Within the PSD2 / Open Finance ecosystem
TIPS is the underlying infrastructure for PIS (an SCT Inst initiated via PSD2 settles there instantly), for Wero/EPI (P2P and merchant), for embedded finance and for dynamic B2B invoicing (Karmen, Defacto advance cash as SCT Inst).
Real-world examples
- Launch: 30 November 2018, the first cross-border SCT Inst in the euro area.
- Cost: ~€0.002 per transaction (a "coverage costs" model).
- 2024 volume: ~30m transactions per month, growing fast with the IPR.
- Wero: P2P payments settle over TIPS or RT1, instantly and free of charge.
- SEK: since February 2024, the Riksbank settles its SEK instant payments on TIPS.
- Digital euro: the ECB could rely on TIPS to settle a retail CBDC.
- Advantage over cards: instant settlement, no chargebacks, near-zero cost — a long-term threat to the Visa/Mastercard model.