FRANKFURT: The European Central Bank will on Friday unveil the first pan-eurozone instant payment service, hoping to become a dominant player in a field crowded by US and Asian tech giants.
The so-called TIPS system will allow consumers and businesses across the 19-nation euro area to send and receive money in mere seconds, without the usual lags associated with online and real-world transactions.
The service will be a direct challenge to the “digital wallets” provided by the likes of Google, Amazon and China’s Alibaba which offer contactless, super-fast payments and have exploded in popularity.
“Banks in the eurozone are under pressure” from tech rivals, said Marc Bayle de Jesse, head of market infrastructure and payments at the ECB.
“TIPS is a way for them to not give up the game to these digital players.”
Local banks across Europe have already responded to demand by creating their own instant payment services that do not however travel across borders, leading to a patchwork of different systems.
The ECB hopes to solve that by offering a single, borderless solution available on smartphones, PCs and at in-store payment points.
The Frankfurt institution said TIPS will initially be open to any person, bank or business in the eurozone but could in future be expanded to other countries and currencies.
TIPS’ speedy delivery is down to being directly linked to central bank funds, avoiding the need for sometimes time-consuming checks between commercial banks that even the “digital wallets” have to contend with.