The European Central Bank (ECB) said that it will develop a new service for the settlement of instant payments.

The new service, TARGET instant payment settlement (TIPS), is expected to start operating in November 2018. It will allow citizens and companies to transfer money between each other in real time.

According to the bank, the new service is expected to contribute in further enhancing integration of Euro in the European region.

The decision to develop a new service to settle instant payments was taken by the Governing Council of the European Central Bank.

The ECB is responsible for smooth and effective functioning of the payment systems in all the regions where Euro is accepted.

The bank has already developed TARGET2,  Eurosystem’s Real Time Gross Settlement System, which is used to process large-value payments in Euro in real time.

TIPS is part of TARGET2 and this will help in facilitating instant money transfers which are offered through banks, so that citizens and firms can make instant payments in real time.

With the TIPS service, the ECB claims that it can make sure that the demand for instant payments is met at a larger European level and can further facilitate in integrating all regions were Euro is accepted.

The service is expected to be developed in close cooperation with European banking industry. It will be offered to banks at a maximum of 0.20 eurocent (€0.0020) per payment for at least the first two years of operation.

Recently, the bank stated that its key interest rates will remain unchanged at –0.4% for the deposit rate and 0% for the refi rate. There were also no changes either in asset purchase or quantitative easing (QE) programme, which will prevail till the end of this year.