An exploratory phase was introduced by the Swiss National Bank and European Central Bank as a way of testing the interconnection of their instant payment systems in 2026. The project will link the SIC instant payment service of Switzerland with the TARGET Instant Payment Settlement (TIPS) of the Eurosystem and allow instant payment in cross-currencies between Swiss francs and euros.
Central banks explore cross-currency instant payment connectivity
The Swiss National Bank (SNB) and the European Central Bank (ECB) are initiating an exploration phase to consider an interlinking of the instant payment service (IP service) of the SIC system and TIPS, the TARGET Instant Payment Settlement service of the Eurosystem, as stated in the SNB press release. The point here is to determine the possibility of such an interlinking as well as its economic viability. It will be a period of exploration, and it will go through the year 2026.
According to the announcement of the European Central Bank, the Governing Council has authorised the commencement of an exploratory phase to consider the possibility of developing a bilateral linkage between the TARGET Instant Payment Settlement (TIPS) service of the Eurosystem and the Swiss Interbank Clearing Instant Payments (SIC IP) system. It will be done in partnership with the Swiss National Bank (SNB), with the exploration phase (evaluating the technical, legal, and economic viability of the project) taking place and continuing through 2026.
Technical feasibility assessment drives a comprehensive evaluation process
It is a part of an ECB project to enhance cross-border payments in the EU and beyond. Besides the cross-currency settlement service that will be introduced in TIPS, the ECB is also considering connecting with other fast payment systems across the globe. The move is in favor of the G20 roadmap in developing a faster, cheaper, more transparent, and accessible global payments ecosystem.
Payments in real time transform the speed and availability of payment
Instant payments enable individuals and business owners to pay and receive domestic account-to-account payments with real-time execution and final settlement within seconds, 24 hours a day, 7 days a week (even on public holidays). It is the reduced settlement chains and instant access to funds that limit risk and provide tremendous benefit to individuals, companies, and commercial banks.
A cross-linking would enable cross-currency instant payments, i.e., payments made in one currency region to be credited in an account in the other region within seconds. This project is aligned with the overall objective of ensuring that cross-border payments are quicker, cheaper, more transparent, and more accessible. Connecting faster international payment systems would enhance their interoperability, lowering their costs and enhancing the speed and transparency of any cross-border payments, such as remittances.
Increased interoperability causes the cost to be lowered with faster transactions
The ruling upholds the G20 roadmap of establishing a faster, cheaper, more transparent, and accessible global payment ecosystem, and assuring secure and reliable instant payments. Connecting international payment systems would enhance their interoperability and make the payment of money across borders cheaper and quicker, as well as more transparent.
It is a project under an ECB initiative to enhance cross-border payments in the EU and the rest of the world. Besides the cross-currency settlement service that will be introduced in TIPS, the ECB is discussing connections to other fast payment systems worldwide. This discussion is a major move towards establishing a smooth flow of finance between Switzerland and the eurozone.
The SNB-ECB partnership is an unprecedented move towards the innovation of cross-border payment, and it will possibly change the way transactions involving the Swiss franc and the euro are conducted across borders. The technical feasibility will be established by the extensive 2026 exploration phase, and it will also consider legal and economic considerations that will result in the successful implementation.