Learn how cards payments systems work: card schemes in the world, the main players, the offerings, innovation and much more.
The Four Corner Model, also called Four-party scheme, is fundamental in payments. It is the model under which the vast majority of payment systems in the world operate. The Four Corner Model for card payments shows the different actors presented in the introductory article and the links between them. For this article, it is important to say in the […]
Payment cards are part of our daily lives. Many of us carry one or more cards in the wallet and we can hardly imagine our lives without them. For us who want to understand payments, it is worth taking some time to look at a payment card thoroughly. That is the purpose of this article. Everything that […]
Payment cards are the leading payment instruments in the world. They are used to initiate over a billion card transactions worldwide every day. There are numerous types of payment cards, the most popular ones being credit cards and debit cards. You can see few examples on the image below. Who are the main players […]
Payment by card has been the favourite method of electronic payment of Europeans for many years. Before the introduction of SEPA, card payments already accounted for over 30% of all transactions in the European union, a quite significant amount. Therefore card payments were naturally put into the scope of the SEPA Project. Even if Visa […]
Banks can join a clearing system or a settlement system as direct participant (DP) or as indirect participant (IP). After reading this post, you will understand the differences between these two types of participants and why only direct participants settle in CSM. The following figure depicts direct and indirect participants and the relationship they have to […]
The Bank of International Settlement (BIS) defines settlement as an act that discharges obligations in respect of funds or securities transfers between two or more parties. Thus settlement is the funds transfer that is carried out by one party to fulfill his obligations towards the counterparty in a financial operation. Settlement must be performed after […]
After presenting the bilateral clearing in the previous article, it is now time to move to the next level: the multilateral clearing. In a multilateral clearing, a high number of financial institutions are involved. But the principle is the same as for bilateral clearing. All the participant banks will exchange payments among each other up to […]
SEPA, the Single Euro Payments Area, is the area where SEPA payment instruments like the SEPA Credit Transfer and SEPA Direct Debit can be used. SEPA countries amount to 34 member states out of which certain states belong to other areas like the Eurozone and the European Economic Area (EEA). This article should help you understand […]
In this article, we will look at push and pull payment transactions, two key concepts in payments. At first, let’s consider the definitions of the words pushing and pulling. Pushing means exerting a force on somebody or something in order to move it away from oneself. Pulling is applying force on somebody or something also, […]
Traditional payment systems operate essentially on two types of models: open loop models and closed loop models. In this post, we will present each of the models with their advantages and drawbacks. Understanding how these models work is crucial for the analysis of payment systems. So read the following very carefully. Open loop models in […]