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According to the recent news, the European Commission is preparing a “regulatory push” to promote the adoption of TIPS (Target Instant Payments Settlement) instant payments service, which is a potential alternative to card solutions and popular digital wallets.
TIPS was launched this year and is designed for both, private and corporate customers across 19 countries in the eurozone. It provides real-time payments through smartphones, PCs and in-store payment spots. The service was designed to help banks enter the sphere of digital contactless payments that have so far been offered by such giants as Apple, Google, Amazon and Alibaba in China. In order for the adoption to be fully implemented, though, as stated by the EU Commission’s vice president in charge of financial services, Valdis Dombrovskis, during a FinTech conference, there is a need for a substantial regulatory push.
The European Commission is seeking to present TIPS as a pan-European bank-to-bank payment network, which would be powerful enough to compete with the existing payment solutions, mainly for euro denominated payments. TIPS, along with another major initiative PSD2, is the key towards increasing Europe’s competitiveness in the sphere of technology- and innovation-powered solutions with such players as US and China. In a few years, Europe is expected to be setting new global standards in the sector of payments technology. Digitalizing payments is the main goal for future creation of payment systems on a strong digital basis. According to PSD2, by September banks should present an interface of communication with third-party providers, as cooperation and APIs are essential for the creation of a powerful payment instruments.
We all remember the ambitious EC’s FinTech Action Plan, and the recent updates on it deserve attention. FinTech labs have been set up in order to promote innovation and digitalization, and the effectiveness of regulatory sandboxes may be evaluated from an official report, which is ready to be published.
As the next step, we are expected to see the establishment of a European Network of Innovation Facilitators, which will allow supervisors to effectively exchange information and communicate to help companies expand and enter the EU market more easily through referral mechanisms.
TIPS and PSD2 are two of Europe’s most ambitious initiatives, and they are projected to dramatically change the region’s payment ecosystem. New era of payments is near, and Europe wants to be among the pioneers, taking advantage of new opportunities, regardless of any possible difficulties.