What is T2?

T2 offers enhanced and modernised services. The system can also facilitate payments in several currencies, should a central bank decide to participate in T2 with its own currency.

Thanks to T2, payments can flow securely and efficiently across Europe, contributing to the stability of the euro by:

• supporting the implementation of the Eurosystem’s monetary policy and the functioning of the euro money market;

• minimising systemic risk in the payments market (i.e. the possibility that a single actor might cause an entire market to collapse);

• ensuring that payments in euro are efficiently processed.

T2 uses the ISO 20022 messaging standard, in common with T2S, TIPS and ECMS. 

Payment orders are sent to T2 for processing and are settled one by one on a continuous basis in central bank money, with immediate finality. There is no upper or lower limit on their value.

T2 comprises two main components: central liquidity management (CLM) and RTGS. CLM supports participants in the intraday management of their liquidity across TARGET Services. RTGS offers a range of liquidity-saving features, including payment priorities, timed transactions, liquidity reservation facilities, limits, liquidity pooling and optimisation procedures.

See the T2 privacy statement on how personal data are processed by T2 in accordance with EU data protection rules.

T2 is used to carry out monetary policy operations in the euro area. The central banks of EU Member States that have not yet adopted the euro can also participate in T2 and use the platform to settle transactions in euro.

Financial institutions can connect to T2 via a participating central bank. They can choose from several different access options:

• Direct participants: financial institutions (including non-bank payment service providers) established in the European Economic Area (EEA) can hold an RTGS account in central bank money in T2. They can send and receive payments on their own behalf or on behalf of their customers.

• Multi-addressees: branches or subsidiaries of a direct participant in the EEA that are authorised to channel payments through the direct participant’s account.

• Addressable BIC: a correspondent of a direct participant that holds a Bank Identifier Code (BIC), irrespective of where it is established.

T2 has two pricing schemes: the RTGS core pricing scheme, applicable to financial institutions for the processing of payment orders and liquidity transfers, and the ancillary system pricing scheme, applicable to ancillary system settlements.

Under each of the two schemes, participants can choose between a lower fixed monthly fee plus a fixed transaction fee, or a higher fixed monthly fee plus a volume-based transaction fee (i.e. a fee that gradually declines as the number of transactions increases).

The TARGET Services pricing guide sets out a comprehensive overview of the pricing schemes, and includes a detailed guide to the billing principles applicable to the various types of transactions, as well as to the entities to be invoiced.