Albania Initiates Implementation of Instant Payments System, Adopting TIPS Clone for Western Balkans

Albania Commences Instant Payments System Implementation

The Bank of Albania has officially begun the implementation of a new instant payments system, dubbed TIPS Clone, a localized adaptation of the European Central Bank's (ECB) TARGET Instant Payment Settlement (TIPS) system. This strategic move is designed to facilitate instant cross-border payments across the Western Balkans region, marking a significant step towards modernizing the financial infrastructure and enhancing regional economic integration. The system is projected to become fully operational by mid-2026.

A Collaborative Regional Initiative

The initiative stems from a collaborative agreement signed on January 10, 2025, at Palazzo Koch in Rome, involving the central banks of several Western Balkan countries and the Banca d'Italia. The Banca d'Italia, acting as a service provider for the Eurosystem's TIPS service, will supply the instant payment system based on TIPS software. Participating countries include Albania, Bosnia and Herzegovina, Kosovo, and Montenegro, with North Macedonia potentially joining at a later stage. The ECB's Governing Council approved the provision of the TIPS clone platform to these central banks on June 7, 2024.

Key Features and Economic Advantages

The TIPS Clone system is set to introduce a range of benefits for both individuals and businesses. It will enable payments to be processed in real-time, operating 24 hours a day, 7 days a week, 365 days a year, with transactions settling in less than ten seconds. The platform is designed to support transactions in multiple currencies, accommodating the diverse currencies of the participating nations, including both the Albanian Lek and the Euro within Albania.

Expected economic advantages include:

• Reduced transaction times and costs, providing immediate practical benefits for users.
• Increased efficiency of the financial system and enhanced financial inclusion.
• A potential reduction in the informal economy.
• Estimated savings for the Albanian economy of approximately 35-40 billion ALL.
• Improved cash flow and operational efficiency for businesses involved in regional trade.

The low-cost and efficient technology of the system aims to make it accessible to a wide range of users, from major businesses to small enterprises and individuals.

Paving the Way for European Integration

This initiative represents a crucial step for the Western Balkan countries towards further integration into the European Union's financial system. By adopting a system modeled after the Eurosystem's TIPS, Albania and its regional partners are aligning their payment infrastructures with European standards, including those of the Single Euro Payments Area (SEPA). This harmonization is expected to facilitate easier and more cost-effective cross-border payments, strengthening economic ties with EU member states and supporting the region's broader European integration agenda.