The Norwegian central bank has moved to enhance the country’s usage of instant payments via a partnership with the European Central Bank (ECB).
Norges Bank will participate in the TARGET Instant Payment Settlement (TIPS) as a result of the partnership. The central bank hopes this will support development of Norwegian instant payments over the coming years.
The bank has been working on developing an instant payments system in Norway since 2020 and has been considering participation in TIPS as an option to achieve this. The bank plans to develop a ‘competitively neutral, secure and efficient’ instant payments system via the TIPS participation.
A target timeline for the launch of an instant payment settlement service has been set for H1 2028. In the meantime, Norges Bank states that it will work with the country’s financial services sector to implement the service ‘at the lowest possible risk’.
“A well-functioning instant payments solution is an important part of an efficient payment system,” said Wolden Bache, Governor of Ida Norges Bank.
“The agreement with the ECB will ensure that infrastructure for instant payments in NOK is developed in pace with developments in the Nordic countries and the rest of Europe.”
Norway’s onboarding onto the systems marks a further expansion of TIPS, which has been facilitating and settling instant payment transfers in Euros and Swedish Krona since its launch in 2018.
The following year, the ECB and SWIFT, the global banking network, trailed cross-border instant payments via TIPS, with participation from leading banks Banque Internationale à Luxembourg, BBVA, Deutsche Bank, Natixis, Santander and UniCredit. Earlier this year, the ECB enabled cross-border payments to be settled on the platform using central bank money.
Danish krone will be added in spring 2025, and Norwegian krone will follow in H1 2026 should the former timeline be met. Norges Bank identified security, contingency, preparedness, cost, and application to local market conditions as being key benefits of TIPS.
