Norges Bank has signed an agreement with the European Central Bank (ECB) to participate in TARGET Instant Payment Settlement (TIPS). TIPS facilitates the sound development of Norwegian instant payments in the years ahead.
Since 2020, Norges Bank has explored an expansion of its role as a settlement bank to include the settlement of instant payments. As part of this, Norges Bank has assessed the option of settling instant payments in NOK via Target Instant Payment Settlement (TIPS). In a public consultation, the banking sector expressed support for the initiation by Norges Bank of negotiations with the ECB on participation in TIPS.
In June 2024, Norges Bank’ Executive Board authorised Governor Ida Wolden Bache to finalise discussions with the ECB, and the agreement was signed by the Governor and ECB President Christine Lagarde on 28 November.
“A well-functioning instant payments solution is an important part of an efficient payment system. The agreement with the ECB will ensure that infrastructure for instant payments in NOK is developed in pace with developments in the Nordic countries and the rest of Europe,” says Governor Wolden Bache.
Instant payments ensure that payees receive funds directly into their accounts seconds after the payment is initiated – 24 hours a day, seven days a week. Participation in TIPS means that instant payment settlement between banks takes place in TIPS, on behalf of Norges Bank.
TIPS was launched in November 2018 and settles payment transfers in euro (EUR) and Swedish krona (SEK). The Danish krone (DKK) will be integrated in spring 2025. Norwegian TIPS participation will facilitate quicker and more efficient money transfers to and from users in other Nordic and European countries. Factors such as security, contingency preparedness and cost, as well as the ability to facilitate requirements specific to Norway, were important in Norges Bank’s assessment.
The instant payment settlement service will be competitively neutral, secure and efficient and enable banks to develop new and innovate customer services. This will enable banks to provide efficient and user-friendly solutions, while maintaining a cost-effective payment system for the financial sector in Norway.
In cooperation with the financial industry, Norges Bank will plan for the transition to the new settlement service to be implemented at the lowest possible risk for all parties involved. The settlement services for instant payments will become available to users in the first half of 2028.
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