Market Watch and other publications are reporting that the European Central Bank is building a unifying real time payments capability to be available across all the eurozone by the end of next year:
The European Central Bank said it would build an instant-payment system spanning the entire eurozone that allows firms and citizens to transfer money in seconds, in an effort to boost financial integration across the 19-nation currency bloc.
The system, scheduled to start operating in November next year, will reduce the time needed for payments between bank accounts from up to one day to mere seconds, the ECB said Thursday. It will be available around the clock, 365 days a year.
Some countries in the eurozone such as Italy and Spain already have real time of instant payments capabilities, but this new system called TARGET Instant Payments System (TIPS) will tie all eurozone countries together.
Transactions will be priced at the low price of EUR0.002 per transaction for the first two years. If it is anticipated that the introductory price will hold for the long term, this could put other pay-now payment rails used for products like debit cards, P2P, bill pay, etc., in jeopardy and may put pressure on other RTP systems to lower fees.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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