“This shows how the 24/7 availability of central bank money provided by TIPS can open new possibilities for the market,” says Mehdi Manaa, deputy director general of market infrastructures and payments with the European Central Bank (ECB), in a press release from Swift.
Stuck on arrival
According to Swift, its GPI platform is already transforming cross-border payments, 40 percent of which are now credited to end beneficiaries within five minutes, and many in seconds.
Yet the final leg depends on the speed of systems in the receiving country, where clearing must take place but is often delayed – for example due to limited operating hours of local clearing systems.
European biggies involved
In the new initiative, six banks from five countries are taking part: Banque Internationale à Luxembourg, BBVA, Deutsche Bank, Natixis, Santander and Unicredit. They do so together with ECB which provides access to its so-called Target services through Eurosystem’s platform TIPS (Target Instant Payments Settlement).
Last year, Swift ran a similar test including Australia’s New Payments Platform (NPP) and banks from four nations in the region.