Collection of funds through direct debits, SEPA Scheme, Interbank exchanges, Domestic clearing systems, Messages standards, Mandates management
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 […]
Many take payment systems for granted and some are not even aware of their existence. But the reality is that our world would be completely different without them. What is a payment? What are payment instruments and payment systems? To start with fundamentals, this first article provides a brief introduction to payments and payment instruments […]