SEPA and Retail Payments

Unlike large-value payments, which are mainly interbank payments, retail payments are customer (individuals or businesses) payments of lower value. Retail payments are based on fiduciary money (notes and coins) or on other payment instruments (payment cards, electronic money, credit transfers, direct debits, cheques).

Habits and conditions differ greatly in Europe when it comes to using these instruments. Therefore, the European Commission and the Eurosystem encourage the European banking industry to develop the Single Euro Payments Area (SEPA).

Following their SEPA credit transfer scheme (SEPA Credit Transfer, SCT), European payment services providers implemented a European SEPA instant credit transfer scheme (SCT Inst) in November 2017. Its participants enable their customers to send and receive payments in near real-time, at any time of the day, 365 days a year. Funds are available to the beneficiary within seconds of the initiation of the instant payment transaction.

With a view of supporting cross-border transactions, the Eurosystem rolled out on 30 November 2018 the TARGET Instant Payment Settlement (TIPS) service. TIPS enable participants to settle instant payments in central bank money and in real-time. 

In order to increase the reach for instant payments in euros (SCT Inst), the Governing Council decided in July 2020 to implement two measures in TIPS. Firstly, Payment Service Providers (PSPs) which are reachable in T2 and which have adhered to the SEPA Instant Credit Transfer (SCT Inst) scheme have to be reachable in TIPS. Secondly, all Automated Clearing Houses (ACHs) offering instant payment services should have their technical accounts inTIPS.

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