As the settlement infrastructure for the euro was previously developed by interconnecting the existing RTGS systems (real-time gross settlement systems) of the member states, it is important that this solution should be gradually replaced by pan-European systems.
The most important pan-European systems:
TARGET2, a complex, decentralized payment system designed to interconnect national systems, is a real-time gross settlement system owned by the Eurosystem. TARGET2 is an important component of the financial integration of the EU that supports the implementation of the single monetary policy. TARGET2 is used by both central and commercial banks to process euro-based payment transactions.
As an extension of TARGET2, the platform for processing high-value payment transactions, Target Instant Payment Settlement (TIPS) was launched on November 2018, offering a continuously available, final and irrevocable instant settlement service for retail payment transactions. As a result, those payment service providers which join the system have the opportunity to offer credit transfer services to their customers every day of the year around the clock without an upper limit. In the system settlement is performed in central bank money and only in euro for now. However, if there is a demand for other currencies, those can be integrated into the system.
The Euro Banking Association (EBA) also operates several pan-European clearing systems. These include EURO1, STEP1, STEP2 and RT1. The EURO1 system, launched in 1998, processes large-value transactions on a net basis, both at a domestic and at a cross-border level. STEP1 is a payment service providing real-time but low-value payment services to complement EURO1. STEP2 is a pan-European automated clearing house which was set up for the mass and low-cost settlement of low-value payment transactions. The RT1 system, launched in November 2017, is a platform for the processing of SEPA instant credit transfers at a pan-European level. RT1 operates around the clock every day of the year and supports payment service providers in transferring euro transactions between payment accounts in less than 10 seconds.
Significant mergers are also taking place between European clearing houses, which could lead to the emergence of new pan-European systems. The Association of European Automated Clearing Houses (EACHA) intends to ensure pan-European coverage by interconnecting existing systems.