Payment Systems From the Salt Mines to the

Payment systems are changing profoundly through regulation, technology and competition from new entrants. This is a comprehensive introduction and reference on payment systems, covering their structure, international systems and settlements, and focusing on electronic transfers. It concludes with the future of the payments business.

DOMINIQUE RAMBURE is Honorary President of the Euro Banking Association, the first payment system for a European currency, and of the Eastern Banking Association, the first payment system between Eastern European countries. Following a career with leading European and US banks, he is now a consultant on payment systems to international organisations and lectures at Paris University.

ALEC NACAMULI, MSC is currently Global Payments Executive at IBM. A 35 year industry veteran, he was previously member of the Executive Committee at SWIFT which he joined at its birth and led its geographical expansion and entry into value-added services and the securities markets.

List of Figures	p. xi
List of Tables	p. xiii
Acknowledgements	p. xiv
Foreword	p. xv
Commonly Used Abbreviations and Acronyms	p. xvii
Introduction	p. xxi
The Structure and Economics of Payment Systems
The Architecture of Payment Systems	p. 3
Introduction and basic concepts	p. 4
Participants in a payment system	p. 7
Payment operations	p. 13
Standards	p. 19
Efficiency criteria for payment systems	p. 20
Payment Instruments	p. 23
Characteristics of payment instruments	p. 23
Cash	p. 25
Cheques	p. 26
Credit transfers	p. 28
Direct debits	p. 30
Cards	p. 32
Payment channels	p. 38
Statistics and comparative trends	p. 39
Cross-Currency Payments and SWIFT	p. 43
Correspondent banking	p. 43
The SWIFT network	p. 46
The correspondent banking and clearing business	p. 49
Remittances	p. 49
Risks in Payment Systems, Oversight and Security	p. 52
Analysis of risks in payment systems	p. 53
Risk management	p. 55
Regulatory oversight	p. 62
Fraud prevention, security and anti money laundering	p. 63
The Role of Payment Systems in the Economy	p. 69
The economic role of payment systems	p. 69
Payment systems and money velocity	p. 70
Network economics	p. 72
Overview of Current Payment Systems
European Payments and SEPA	p. 77
SEPA	p. 77
The Payment Services Directive (PSD)	p. 79
The TARGET2 RTGS system	p. 81
Clearing and settlement mechanisms (CSMs)	p. 86
The EBA payment systems	p. 86
The SEPA schemes and frameworks	p. 88
Business and operational impact of SEPA	p. 91
The UK payment systems	p. 96
The US Payment Systems	p. 103
Fedwire	p. 104
The Federal Reserve national settlement system	p. 105
CHIPS	p. 105
The ACH Network	p. 107
Cheques	p. 108
Cards	p. 109
Trends	p. 110
Overview of the US securities clearing and settlement systems	p. 112
Major Asian Payment Systems	p. 114
Payment and securities clearing and settlement systems in Japan	p. 115
Payment and securities settlement systems in China and Hong Kong SAR	p. 121
New Entrants	p. 130
Remittance service providers	p. 130
Non-bank issued credit cards	p. 131
Transport cards	p. 131
Mobile phones and mobile payments	p. 132
Paypal	p. 134
Earthport	p. 135
The Settlement of Trading Activities
The Settlement of Foreign Exchange Trades and CLS	p. 139
The settlement of foreign exchange trades and settlement risk	p. 139
CLS	p. 142
CLS operating procedures and timetable	p. 144
Risk and liquidity management in CLS	p. 145
Market and business impact of CLS	p. 146
Securities Settlement	p. 148
Securities clearing and settlement systems	p. 149
Risks in securities settlement systems	p. 150
Settlement risk management	p. 151
Consolidation of exchanges and the clearing and settlement landscape	p. 152
TARGET2-Securities	p. 156
Wholesale Payment, Cash Management and Trade Facilitation Services
The Requirements of Corporations	p. 161
The role of the treasury department	p. 162
Electronic invoicing	p. 165
Supply chain finance (SCF)	p. 168
Corporate Banking Services	p. 172
Electronic banking and communication channels	p. 172
Reporting, cash management and treasury services	p. 173
Electronic invoicing and supply chain financing services	p. 174
Fees and remuneration	p. 174
Selection criteria	p. 175
Banks and the Payments Business
The Banks' Back Offices	p. 179
Payment processing and STP	p. 179
Departments involved	p. 183
Operations	p. 183
IT systems	p. 184
Payments as a Business for Banks	p. 188
Payments within banks' overall strategy	p. 188
The economics and profitability of payments services	p. 188
Organization and governance	p. 190
Development of an enterprise-wide payments strategy	p. 190
The Future
Where is the Payments Industry Going?	p. 195
Instruments	p. 195
Payment systems architectures, schemes, standards and operators	p. 197
Risk and fraud management	p. 200
Governance and oversight	p. 200
Settlement of financial markets trading	p. 201
Regional developments	p. 202
Corporate banking	p. 202
New entrants	p. 203
Operations	p. 203
Revenue shifts and shrinkage	p. 203
Conclusion	p. 205
Appendix	p. 207
Notes	p. 208
Bibliography and Useful Websites	p. 213
Glossary	p. 216
Index	p. 229
Table of Contents provided by Ingram. All Rights Reserved.

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Payment Systems From the Salt Mines to the Board Room

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