The European Commission (EC) is planning at implementing new rules to accelerate the adoption of TARGET Instant Payments Settlement System (TIPS) in an effort to challenge card companies and tech giants based in other parts of the world.
Image: EC looking to explore a regulatory push for promoting TIPS instant payments. Photo: courtesy of Corentin Béchade/Wikipedia.org.
TIPS, which is an instant payment system, is available for consumers and businesses in the 19 states in the Eurozone. It provides near real-time payments through smartphones, personal computers and in-store payment points.
TIPS was launched in November 2018 by the European Central Bank (ECB).
During a speech at the 3rd annual Afore Fintech Conference in Brussels, EC Vice-President Valdis Dombrovskis said that the European Union is on the verge of seeing a pan-European, fast bank-to-bank payment network.
The payment network can potentially disrupt current payment solutions, including cards, for at least euro denominated payments, said the EC Vice President.
In the coming few years, the EC aims to see citizens use instant payments in Euro across borders similar to the way they currently use cash, bank transfers or cards. For this to happen, the EC would need to bring in common standards, and a commitment by market operators to use them, said Dombrovskis.
The Commission’s objective is to ensure that Europe sets new global standards for payments technology, especially when China and other countries in the world are developing their payment systems directly on a digital basis.
Dombrovskis wants the European Union to seize the present opportunity and accelerate its efforts to digitalize its payments.
The EC Vice President said: “The Commission has already put in place EU-level regulation, and supported infrastructure to allow pan-European payment solutions to emerge. It is now for the market to develop these solutions, and speed is of the essence.
“But the Commission can help, for example by supporting the development of interoperability standards among different Member State technologies.”
Dombrovskis concluded that the Commission is exploring if a stronger regulatory push would be required to speed up the process of adapting pan-European payment solutions. The scheduled review of the Payments Account Directive this year is expected to be used for pursuing actions in this regard, said the EC Vice President.
Last March, the Commission unveiled a new fintech action plan on how to harness the opportunities presented by technology-enabled innovation in financial services (FinTech).