Frankfurt, Germany-August 16 : Euro Sign. European Central Bank (ECB) is the central bank for the euro and the monetary policy of the Eurozone. August 16, 2015 in Frankfurt, Germany.

As European nations are looking to become increasingly cashless, the European Central Bank (ECB) has launched a pan-eurozone instant payments system.

The newly-introduced system – called the Target Instant Payments Settlement (TIPS) – arrives as the ECB’s answer to the surge of digital wallets. 

TIPS will be available to be used by both businesses and consumers in the 19 member states of the eurozone, giving them the opportunity to utilise near real-time payments through their mobile phones, PCs and in-store payment points. 

As tech giants including Apple, Google, Amazon and even China-based Alibaba are looking to become cashless, the ECB launched a system whereby clients will be able to make use of digital and contactless payment services.

Head of market infrastructure and payments at the ECB Marc Bayle de Jesse believes that: “Banks in the eurozone are under pressure” from several tech competitors.

He added that “TIPS is a way for them to not give up the game to these digital players.” 

Although several banks have taken the step forward to launch instant payment services for domestic use, there has been no initiative, as of yet, for cross-border transactions. 

As a result, the ECB is looking to satisfy this need through the TIPS system. The latter will be directly linked to Europe’s central lender, therefore dodging some of the settlement process which could thwart instant payments. 

During the system’s launch in Rome, eight participating banks were revealed including several Spanish ones and BPCE, the second largest lender in France. 

The ECB stated that although the system will at first be limited to eurozone clientele, it has not eliminated the possibility of extending its service to other currencies and non-EU countries.