So, TIPS is just one of the available clearing mechanisms available for the SEPA Inst scheme. (The other one is RT1, which is live a little bit longer)
Currently, there is no "regulatory forced" interoperability between RT1 and TIPS, though the 4CB are discussing it. (Esp. since RT1 is a private clearing mechanism, while TIPS is the one operated by the 4CB)
And, regarding fee: You are wrong - depending on the local jurisdiction (esp. consumer rights), a bank may for sure charge for processing SEPA SCT Instant messages. Over here, SEPA Instant transactions are around 0,50EUR - 1,00EUR, currently; some are also offering them for free.
DISCLAIMER: Lead Payment Engineer at an European Challenger Bank, i'm implementing that stuff in the backend, i'm mainly talking to our central bank.
They didn't say that banks cannot charge for SCT Instant.
They said that banks can't charge more for international than they do for domestic.
for sure i can charge you more for a SWIFT or T2 EU-transaction than i do for a SEPA EU-transaction.
Interesting. In my country (Finland) all banks that have joined the TIPS (SEPA Instant Settlement) always use it automatically if the destination bank supports it as well - at no extra charge to the account holder of course. Are you sure you are talking about TIPS / SCT Inst payments? Either way, your bank is not allowed to charge extra fees for cross-border SEPA transfers (as compared to domestic.)