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Real-time gross settlement (RTGS) systems are specialist funds transfer systems where the transfer of money or securities takes place from one bank to any other bank on a "real-time" and on a "gross" basis to avoid settlement risk. Settlement in "real time" means a payment transaction is not subjected to any waiting period, with transactions being settled as soon as they are processed. "Gross settlement" means the transaction is settled on a one-to-one basis, without bundling or netting with any other transaction. "Settlement" means that once processed, payments are final and irrevocable.
ISO 20022 is an ISO standard for electronic data interchange between financial institutions. It describes a metadata repository containing descriptions of messages and business processes, and a maintenance process for the repository content. The standard covers financial information transferred between financial institutions that includes payment transactions, securities trading and settlement information, credit and debit card transactions and other financial information.
A payment system is any system used to settle financial transactions through the transfer of monetary value. This includes the institutions, payment instruments such as payment cards, people, rules, procedures, standards, and technologies that make its exchange possible. A payment system is an operational network which links bank accounts and provides for monetary exchange using bank deposits. Some payment systems also include credit mechanisms, which are essentially a different aspect of payment.
The Eurosystem is the monetary authority of the eurozone, the collective of European Union member states that have adopted the euro as their sole official currency. The European Central Bank (ECB) has, under Article 16 of its Statute, the exclusive right to authorise the issuance of euro banknotes. Member states can issue euro coins, but the amount must be authorised by the ECB beforehand.
The Single Euro Payments Area (SEPA) is a payment integration initiative of the European Union for simplification of bank transfers denominated in euros. As of 2020, there were 36 members in SEPA, consisting of the 27 member states of the European Union, the four member states of the European Free Trade Association, and the United Kingdom. Some microstates participate in the technical schemes: Andorra, Monaco, San Marino, and Vatican City.
TARGET2 was the real-time gross settlement (RTGS) system for the Eurozone from its phased introduction in 2007-2008 until its replacement with T2 in March 2023. As such, it was one of the Eurosystem's TARGET Services, replacing the original TARGET RTGS introduced in 1999. Like the other TARGET Services, it was developed and owned by the Eurosystem.
TARGET2-Securities, in shorthand T2S, is the Eurosystem's platform for securities settlement in central bank money. T2S offers centralised delivery-versus-payment (DvP) settlement across several European securities markets, without being itself a central securities depository (CSD) since it does not offer CSD services such as custody or asset servicing.
Payment and settlement systems are used for financial transactions in India. Covered by the Payment and Settlement Systems Act of 2007, legislated in December 2007, they are regulated by the Reserve Bank of India (RBI) and the Board for Regulation and Supervision of Payment and Settlement Systems.
The Clearing House Automated Transfer System, or CHATS, is a real-time gross settlement (RTGS) system for the transfer of funds in Hong Kong. It is operated by Hong Kong Interbank Clearing Limited (HKICL), a limited-liability private company jointly owned by the Hong Kong Monetary Authority (HKMA) and the Hong Kong Association of Banks. Transactions in four currency denominations may be settled using CHATS: Hong Kong dollar, renminbi, euro, and US dollar. In 2005, the value of Hong Kong dollar CHATS transactions averaged HK$467 billion per day, which amounted to a third of Hong Kong's annual Gross Domestic Product (GDP); the total value of transactions that year was 84 times the GDP of Hong Kong. CHATS has been referred by authors at the Bank for International Settlements to as "the poster child of multicurrency offshore systems".
The Irish Payment Services Organisation Limited (IPSO) was established in June 1997. IPSO was a company limited by guarantee owned by its member banks.
Payments as a service (PaaS) is a marketing phrase used to describe software as a service to connect a group of international payment systems. The architecture is represented by a layer – or overlay – that resides on top of these disparate systems and provides for two-way communications between the payment system and the PaaS. Communication is governed by standard APIs created by the PaaS provider.
CLS Group, or simply CLS, is a specialized financial market infrastructure group whose main entity is the New York-based CLS Bank. It started operations in 2002 and operates a unique and global central multicurrency cash settlement system, known as the CLS System, which plays a critical role in the foreign exchange market. Although the forex market is decentralised and has no central exchange or clearing facility, firms that chose to use CLS to settle their FX transactions can mitigate the settlement risk associated with their trades. CLS achieve this thanks to a central net and gross payment versus payment settlement service directly connected to the real-time gross settlement systems of participating jurisdictions through accounts at each of their respective central banks.
EBA Clearing is a provider of pan-European payment infrastructure wholly owned by shareholders that consist of major European banks. It derives its name from the Euro Banking Association which was instrumental in its establishment in June 1998, but has always been a separate organization.
SIA S.p.A. is an Italian company operating in the area of ICT, providing services to the banking and finance sector in addition to platforms for financial markets and e-payment services.
Swish is a mobile payment system in Sweden. The service was launched in 2012 by six large Swedish banks, in cooperation with Bankgirot and the Central Bank of Sweden. It had 8 million users as of July 2022.
The European Payments Initiative (EPI), previously known as the Pan-European Payments System Initiative (PEPSI), is a unified digital payment service backed by 16 European banks and payment service providers. Its aim is to allow European consumers and merchants to make next-generation payments for all types of person-to-person transfers and retail transactions via a digital wallet, called Wero. Wero is based on instant account-to-account payments and will eliminate intermediaries in the payment chain and associated costs.
FedNow is an instant payment service developed by the Federal Reserve for depository institutions in the United States, which allows individuals and businesses to send and receive money. The service launched on July 20, 2023. Banks will be able to build products on top of the FedNow platform. By 2024, hundreds of banks and credit unions were reportedly utilizing the service.
T2 is a financial market infrastructure that provides real-time gross settlement (RTGS) of payments, mostly in euros. It is operated by the European Central Bank and is the critical payments infrastructure of the euro area. With turnover in the trillions of euros every day, it is one of the largest payment systems in the world. It is one of three so-called TARGET Services, together with TARGET2-Securities (T2S) for securities and TARGET Instant Payment Settlement (TIPS) for fast payments. The acronym TARGET stands for Trans-European Automated Real-time Gross-Settlement Express Transfer.
TARGET Services are payment services operated by the Eurosystem for the euro area and beyond on its proprietary financial market infrastructures.
The Eurosystem Collateral Management System (ECMS) is a unified platform for collateral management in the Eurosystem, intended to support the effectiveness of monetary policy in the euro area. It is one of the Eurosystem's TARGET Services, together with T2 for large payments, TARGET Instant Payment Settlement (TIPS) for instant payments, and TARGET2-Securities (T2S) for securities settlement.
References
- ↑ "T2 and the settlement of gross payments". Banca d'Italia. Retrieved 24 December 2024.
- 1 2 "What is TIPS?". European Central Bank. Retrieved 25 December 2024.
- ↑ "SEPA Instant Credit Transfer". European Payments Council. Retrieved 25 December 2024.
- ↑ "TIPS facts and figures". European Central Bank. Retrieved 25 December 2024.
- ↑ "TARGET Annual Report 2023". European Central Bank.
- ↑ "Sweden joins TIPS – Eurosystem instant payments platform also settles in kronor". European Central Bank. 27 February 2024.
- ↑ "Denmark joins T2 and TIPS to fully integrate Danish krone in Eurosystem's payment services". European Central Bank. 21 March 2024.
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