TIPS stands for TARGET Instant Payment Settlement. I use this term to describe the Eurosystem service that settles instant payments in central bank money. It operates continuously. Therefore, it supports payments twenty-four hours a day, every day of the year. TIPS is part of the TARGET Services. However, it focuses on instant retail payments, not on large-value payments or securities settlement.
Although TIPS belongs to the domain of payment systems, I use it here as a real-world use case. My goal is to apply requirements engineering and system analysis methods to a highly regulated and time-critical IT system. Therefore, I describe its behaviour in a structured and neutral way. At the same time, I translate operational concepts into clear language that supports later requirements definition and validation.
TIPS settles instant payment transactions individually and irrevocably. Each payment settles in real time if sufficient liquidity is available. Otherwise, the transaction fails immediately. For this reason, liquidity management plays a central role. Participants pre-fund dedicated accounts and move liquidity dynamically. Moreover, the service supports automated liquidity transfers, floor and ceiling limits, and rule-based transfers. As a result, participants can balance liquidity efficiently without manual intervention.
From a system analysis perspective, TIPS is highly instructive. It combines extreme availability requirements with strict time constraints and harmonised European rules. In addition, it serves many stakeholders, including banks, clearing solutions, and central banks. Therefore, I treat it as a reference case for distributed systems with deterministic behaviour, strong consistency, and minimal tolerance for ambiguity. In short, TIPS is not just an instant payment platform. Instead, it is a practical example for analysing non-functional requirements, interface contracts, and operational constraints in critical financial infrastructures.