Article

TIPS cross-currency settlement: Why faster settlement is only part of the story

Laura Bedborough

22 Jul 2026

Digital Transformation Efficiency & Operations Fintech Innovation

Freight trucks and vehicles traveling on a major highway, representing connected networks, commerce, and efficient movement across regions.

Instant payments have reshaped expectations for domestic money movement. Across Europe and beyond, consumers and businesses increasingly expect funds to move immediately, be available around the clock, and arrive with greater transparency. Cross-border payments have been slower to keep pace. Foreign exchange processes, intermediary institutions, reconciliation requirements, and fragmented infrastructures continue to make them more complex than domestic transactions.

On 10 June 2026, an important step was taken toward closing that gap. The Target Instant Payment Settlement (TIPS) cross-currency service was activated, enabling payment service providers (PSPs) to settle instant payments between euro, Danish krone, and Swedish krona accounts, with both currency legs settled simultaneously in central bank money. Participating PSPs across TIPS, TIPS-DKK, and RIX-INST can now process transactions across the three currencies with lower settlement risk and greater certainty.

The significance extends beyond the technology itself. TIPS cross-currency is not just about enabling faster settlement between three currencies; it reflects a broader industry effort to make cross-border payments as seamless and predictable as domestic ones. The G20 has set a target for 75% of cross-border retail payments to reach recipients within one hour by the end of 2027¹, alongside comparable speed targets for wholesale payments and remittances. TIPS cross-currency provides a practical example of how market infrastructures are evolving to support those ambitions.

The timing is important. Global non-cash transaction volumes are projected to more than double, from $1,685 billion in 2024 to $3,540 billion by 2029², while global cross-border payment flows are expected to grow from $194,6 trillion in 2024 to $320 trillion by 2032³. As volumes rise, financial institutions must support a market that is becoming more real-time, cross-border, data-rich and always-on.

The challenge is that faster settlement is only one part of delivering that experience.

A milestone, not a finish line

TIPS cross-currency addresses one of the traditional friction points in cross-border payments: settlement. For years, payments could move efficiently through parts of the journey only to be slowed by settlement processes, beneficiary institution operations, compliance requirements, or currency conversion. By enabling simultaneous settlement across multiple currencies in central bank money, TIPS reduces uncertainty and improves efficiency.

But even with faster settlement, the wider payment journey can still introduce friction. Funds may move quickly between institutions, yet delays can still occur before they reach the end customer.

Swift data shows 75% of cross-border payments already reach the beneficiary bank within 10 minutes, while more than 90% arrive within an hour. The slowdown happens after that. Swift's own analysis shows the “last mile” – between the beneficiary bank receiving a payment and crediting the end customer – can account for more than 80% of the total payment journey.⁴

These findings suggest that the industry's biggest constraint is increasingly operational rather than network-based. As payment rails become faster, operational processes must keep pace. Liquidity management, compliance and fraud screening, exception handling, and payment visibility all need to operate efficiently to deliver the real-time experience customers increasingly expect.

Many institutions are still working towards that goal. Capgemini's World Payments Report 2025 found that 5% of banks are highly prepared for the acceleration of instant payments, while 67% remain moderately prepared⁵. Legacy infrastructure is a big part of why: research from Accenture and KPMG puts 59% of banks facing challenges with legacy payment systems⁶, and 62% citing technical debt as a major obstacle to modernizing payments. The difference is even sharper between institutions at different stages of transformation, with 62% of banks in the early stages of modernization citing legacy infrastructure and technical debt as major barriers, compared with 25% of more advanced institutions⁷.

The challenge becomes even greater as payments increasingly move across multiple networks, currencies, schemes, and infrastructures.

Building for an interconnected payments ecosystem

If operational readiness is the first challenge, interoperability is the second. TIPS cross-currency reflects a broader direction of travel for the industry. Payments are no longer operating within isolated domestic systems.

In this environment, simply connecting to a payment rail is not enough. Organizations need the flexibility to adapt to evolving standards, onboard new schemes, support emerging payment flows, and maintain consistent operations across an increasingly complex ecosystem.

This is where Finastra's Financial Messaging solution becomes relevant: a secure, API-driven SaaS platform for end-to-end financial messaging that connects institutions to Swift and other market infrastructures. It helps institutions connect to more than 30 domestic and international payment rails across 25 countries (and growing) through a single platform, simplifying connectivity while supporting instant payments, cross-border transactions, and access to value-added services such as fraud prevention and financial crime controls.

As payments continue to evolve, connectivity becomes about far more than message exchange. It underpins the ability to support standards such as ISO 20022, improve straight-through processing, launch new payment services more efficiently, and maintain operational resilience as the ecosystem grows.

The next priority for financial institutions

TIPS cross-currency settlement is an important step forward for European payments. It demonstrates how instant payment infrastructures can extend beyond national and single-currency boundaries, creating a foundation for faster and more predictable cross-border transactions.

What it does not remove is the need for modernization. If anything, it makes that requirement more visible. As settlement becomes faster and more efficient, competitive advantage increasingly depends on the infrastructure that surrounds the payment itself.

The organizations best positioned for the next phase of payments evolution will be those capable of combining connectivity, interoperability, and operational resilience. As payment volumes continue to grow, and cross-border expectations continue to rise, the focus increasingly shifts from faster rails to the infrastructure needed to orchestrate them.

For financial institutions, PSPs, non-banking financial institutions (NBFIs), and corporates, the next priority is clear: build the connectivity layer required to participate in a more connected, real-time payments economy.