Mastercard on Central Bank Rails: What the TIPS Pilot Means for the Payments Industry

§ 01 Executive Snapshot

• What: Mastercard successfully processed live payments using the ECB's TIPS platform, enabling atomic settlement in central bank money.
• Who: Key players include Mastercard, ECB, Danmarks Nationalbank, and Sveriges Riksbank.
• Why it matters: This pilot demonstrates the potential for non-bank payment service providers to participate directly in central bank infrastructure, marking a significant shift in the payments industry.

§ 02 Key Developments

• Mastercard Move was among the first non-bank participants in the TIPS pilot, processing transactions using TIPS’s cross-currency functionality, which went live in June 2025.
• The Instant Payments Regulation adopted in March 2024 broadened participation eligibility to include payment institutions and e-money institutions.
• TIPS transaction volumes more than doubled in 2025, reaching 2.47 billion transactions compared to 1.35 billion in 2024.

§ 03 Strategic Context

• The shift in access to TARGET infrastructure for non-banks has evolved through regulatory changes, allowing broader participation in central bank payment systems.
• The pilot illustrates the convergence of instant payment regulations and the operational capabilities of non-bank payment services, aligning with ECB governance and standards.

§ 04 Strategic Implications

• The immediate consequence is the potential for non-bank financial institutions to operate independently in the central bank payment ecosystem, reducing reliance on traditional banks.
• Long-term, the structural shift could lead to increased competition and innovation in the payments market, as more non-banks can directly access central bank infrastructure.

§ 05 Risks & Constraints

• Regulatory risks remain as the new framework is tested and adopted by various payment institutions, which could impact compliance and operational readiness.
• Competition from traditional banks, which currently provide settlement services, may influence the pace at which non-banks can fully leverage the new access regime.

§ 06 Watchlist / Forward Signals

• The first standard payment institution or e-money institution to hold a live TIPS DCA as a direct participant will be a significant milestone to monitor.
• Upcoming deadlines in 2027 and 2028 for extending instant payment obligations to non-euro-area EU banks and all EU member states will signal further structural changes in the payments landscape.