What is a payment?
A payment is a transfer of funds from payer to payee.
Who is payer?
A payer is the party to a payment transaction which issues the payment order or agrees to the transfer of funds to the payee.
Who is Payee?
A payee – or beneficiary – is the final recipient of funds.
Why payment and payment systems are required?
“No Payment No Trade “
What is payment instrument?
Payment instruments are a means of authorizing and submitting a payment (i.e. the means by which the payer gives its bank authorization for funds to be transferred or the means by which the payee gives its bank instructions for funds to be collected from the payer.
What is payment processing?
Processing (including clearing)which involves the payment instruction being exchanged between the banks and accounts.
What is settlement?
Settlement is defined as an act that discharges obligations in respect of funds between two or more parties
What is clearing?
The clearing process is to aggregate all the payment orders and calculate the “net credit/debit position” of each participant.
What are FI’s?
A financial institution is an organization that provides services that people need to manage their money. Financial institutions include banks and credit unions, insurance companies, stock brokerage firms etc.