The instant credit transfer scheme for the single euro payments area (SEPA) is due to become operational from 21 November 2017. With just a few weeks to go before SEPA Inst, as it's called, goes live, the European Payments Council (EPC) has published an interview with its own Marc Bayle on how another part of the instant payments picture is being developed. The Eurosystem – the eurozone's monetary authority – has developed a clearing service for instant payments in euro, called the TIPS (TARGET Instant Payment Settlement) service. What is it and how does it relate to other clearing and settlement services?

What is TIPS?

TIPS is a pan-European instant payment settlement service in central bank money and it only provides settlement for instant payments. Bayle explains that it will support compliance with the SEPA Inst scheme, which is due to go live later this month. The main features of TIPS are:

• settlement in central bank money extended to 24/7/365
• payment transactions settled instantly, eliminating credit risk for participants
• balances on TIPS accounts included in minimum reserve calculations
• service providers reachable without opening a TIPS account (by being a reachable party)
• maximum price of 0.20 eurocent per payment for at least the first two years of operation
• targets efficient settlement in euro, but technically capable of settling other currencies.

Bayle also explains that the Eurosystem decided to develop TIPS due to its experience in developing and managing TARGET2, the euro's real-time gross settlement (RTGS) system, and also because TIPS matches the Eurosystem's objective of promoting innovation and fostering integration within the euro area.

Timeline for TIPS

TIPS is due to go live on 30 November 2018 – one year after SEPA Inst becomes operational. The project is currently in development phase. The timeline for development is as follows:

• April 2018: The User Detailed Functional Specifications are scheduled to be finalised and made available and shortly afterwards, details of how users interact with TIPS’ Graphical User Interface will be finalised.
• July 2018: the software will be completed and the application will be tested by the Eurosystem.
• September 2018: users will have the possibility to have end-to-end tests performed.
• 30 November 2018: go live.

To read the full interview on TIPS see: All about TARGET Instant Payment Settlement (TIPS)