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There are several types of PS. Due to the different scales of activity of specific payment structures and the nature of their operations for servicing various segments of the payment turnover, both in the analytical literature and in supervisory practice, there are:
The category of wholesale payments includes transactions of large value and, as a rule, urgent in terms of execution, which mediate interbank settlement transactions and settlement transactions in the money and stock markets. Large payments cover all types of interbank money settlements, including payments for money market transactions, securities and foreign exchange transactions. Such payments are processed and settled on an individual basis.
This division makes it possible to distinguish between fundamentally different areas of settlement services, to highlight special types of settlement structures, mechanisms and tools used in these areas, and to form control procedures for overseeing their operation.
Among modern PS, there are those whose role in the functioning of the economic mechanism is especially great. These systems require increased attention and constant monitoring of their activities by the regulator. Thus, according to KP PC initiative in the practice of monitoring the wholesale PS uses the concept of systemically important PS (systemically important payment system - SIPS) . These are systems that, due to their unique characteristics, perform especially important functions in the national economy and have the ability to initiate systemic violations both in the field of monetary settlements and in the financial system as a whole. It is customary to classify such systems as PS that meet at least one of the following criteria:
As a rule, SIPS refers to systems of gross settlements in real time (Real Time Gross Settlements - RTGS) (see Chapter 5), for example Fedwire (CIUA), TARGET2 (Eurozone), since a significant volume of payments passes through them. The SIPS group also includes large systems that make payments on the basis of netting (for example, CHIPS (USA), euro CHAPS (UK)) (see Chapter 5). It is the last category of PS that is most susceptible to risks. Finally, the system includes PSs that have no analogues that can replace them. For example, the CLS multicurrency settlement system belongs to the SIPS category, since all final settlements for currency conversion transactions, as well as transactions with derivatives, go through this system (see Chapter 5).
As for retail PSs, they were also divided according to their degree of importance into Systemically Important Retail Payment System (SIRPS), Prominently Important Retail Payment System (PIRPS), and others. To classify retail PSs operating on the territory of the European Union (hereinafter referred to as the EU) to one category or another, the European Central Bank (hereinafter referred to as the ECB) in 2003 proposed using such indicators as the volume and nature of payments processed in the system; the share of the PS in the market; the risk of the "domino effect" | ECB, 2003]. These issues will be discussed in more detail in Chapter 4, which is devoted to cashless payments in the retail sector of the economy.
According to the method of organizing settlements, there are gross settlement systems (gross) and net settlements (deferred payment systems). In the first case, calculations are made on a gross basis: the transfer of funds is carried out individually, separately for each operation, and in a continuous mode, as payment instructions are received at the computer center of the system. In this case, the transfer of funds in the gross settlement system is made in the full amount specified in the payment instruction. As a rule, the originator of the payment in gross systems is the sender of the funds. Settlements in gross systems are made through the accounts of the participants with the settlement bank, which is usually performed by the central bank. These systems are used by financial organizations for settlements in large payments, for which strict payment terms and timely settlement of settlements are important. Similar systems are also used to settle the final settlement of net positions that are generated in deferred net settlement systems.
In the case of net settlements, payment is not made immediately, payment documents are accumulated as they arrive at the computer center of the system during the billing period. At the end of the billing period, the settlement of mutual claims for the final balance is carried out. In the case of net settlements, all transactions received by the PS are processed, but only balanced ones are executed - those payments that cannot be cleared by repayment of counterclaims of counterparties. Net settlements are risky because there is a risk of non-payment when settlement participants have a negative balance.
In Depending on the type of payment messages substation is divided into PS, based on debit and credit transfers (transfer). With a debit transferthe initiator (“originator”) of the payment is the recipient of the money, who sends the payer's bank an order to withdraw money from his bank account and transfer the corresponding amount to the recipient's account in his banking institution (see arrows 1, 2 in Fig. 1.1). Having received an order to withdraw money from the payer's account, the payer's bank debits the latter's account and credits the receiving bank's correspondent account (3), to which the credit memo (4) is sent. The payer receives a statement from the account (5), the beneficiary is a notification of the transfer of money (6). Thus, with a debit transfer, the payment request moves from the recipient to the payer, and the amount of money - vice versa: from the payer to the recipient.
Non-cash settlement instruments based on debit transfers include (see Chapter 2 in detail):
- check: a check is a written order from the client to the bank that maintains his account for the payment of a certain the amount of money to the bearer of the check, or by his order to another person who is indicated in the check;
Calculations based on credit transfers are (see chapter 2 in detail):
- 1) retail PS (retail payment system);
- 2) wholesale PS (wholesale payment system) or PS for large amounts (large value payment system - LVPS).
The category of wholesale payments includes transactions of large value and, as a rule, urgent in terms of execution, which mediate interbank settlement transactions and settlement transactions in the money and stock markets. Large payments cover all types of interbank money settlements, including payments for money market transactions, securities and foreign exchange transactions. Such payments are processed and settled on an individual basis.
This division makes it possible to distinguish between fundamentally different areas of settlement services, to highlight special types of settlement structures, mechanisms and tools used in these areas, and to form control procedures for overseeing their operation.
Among modern PS, there are those whose role in the functioning of the economic mechanism is especially great. These systems require increased attention and constant monitoring of their activities by the regulator. Thus, according to KP PC initiative in the practice of monitoring the wholesale PS uses the concept of systemically important PS (systemically important payment system - SIPS) . These are systems that, due to their unique characteristics, perform especially important functions in the national economy and have the ability to initiate systemic violations both in the field of monetary settlements and in the financial system as a whole. It is customary to classify such systems as PS that meet at least one of the following criteria:
- 1) are unique in a given country and cannot be replaced by other systems;
- 2) make a large volume of payments that occupy a large share in the total turnover;
- 3) systems that service settlements in the money, foreign exchange and stock markets.
As a rule, SIPS refers to systems of gross settlements in real time (Real Time Gross Settlements - RTGS) (see Chapter 5), for example Fedwire (CIUA), TARGET2 (Eurozone), since a significant volume of payments passes through them. The SIPS group also includes large systems that make payments on the basis of netting (for example, CHIPS (USA), euro CHAPS (UK)) (see Chapter 5). It is the last category of PS that is most susceptible to risks. Finally, the system includes PSs that have no analogues that can replace them. For example, the CLS multicurrency settlement system belongs to the SIPS category, since all final settlements for currency conversion transactions, as well as transactions with derivatives, go through this system (see Chapter 5).
As for retail PSs, they were also divided according to their degree of importance into Systemically Important Retail Payment System (SIRPS), Prominently Important Retail Payment System (PIRPS), and others. To classify retail PSs operating on the territory of the European Union (hereinafter referred to as the EU) to one category or another, the European Central Bank (hereinafter referred to as the ECB) in 2003 proposed using such indicators as the volume and nature of payments processed in the system; the share of the PS in the market; the risk of the "domino effect" | ECB, 2003]. These issues will be discussed in more detail in Chapter 4, which is devoted to cashless payments in the retail sector of the economy.
According to the method of organizing settlements, there are gross settlement systems (gross) and net settlements (deferred payment systems). In the first case, calculations are made on a gross basis: the transfer of funds is carried out individually, separately for each operation, and in a continuous mode, as payment instructions are received at the computer center of the system. In this case, the transfer of funds in the gross settlement system is made in the full amount specified in the payment instruction. As a rule, the originator of the payment in gross systems is the sender of the funds. Settlements in gross systems are made through the accounts of the participants with the settlement bank, which is usually performed by the central bank. These systems are used by financial organizations for settlements in large payments, for which strict payment terms and timely settlement of settlements are important. Similar systems are also used to settle the final settlement of net positions that are generated in deferred net settlement systems.
In the case of net settlements, payment is not made immediately, payment documents are accumulated as they arrive at the computer center of the system during the billing period. At the end of the billing period, the settlement of mutual claims for the final balance is carried out. In the case of net settlements, all transactions received by the PS are processed, but only balanced ones are executed - those payments that cannot be cleared by repayment of counterclaims of counterparties. Net settlements are risky because there is a risk of non-payment when settlement participants have a negative balance.
In Depending on the type of payment messages substation is divided into PS, based on debit and credit transfers (transfer). With a debit transferthe initiator (“originator”) of the payment is the recipient of the money, who sends the payer's bank an order to withdraw money from his bank account and transfer the corresponding amount to the recipient's account in his banking institution (see arrows 1, 2 in Fig. 1.1). Having received an order to withdraw money from the payer's account, the payer's bank debits the latter's account and credits the receiving bank's correspondent account (3), to which the credit memo (4) is sent. The payer receives a statement from the account (5), the beneficiary is a notification of the transfer of money (6). Thus, with a debit transfer, the payment request moves from the recipient to the payer, and the amount of money - vice versa: from the payer to the recipient.
Non-cash settlement instruments based on debit transfers include (see Chapter 2 in detail):
- check: a check is a written order from the client to the bank that maintains his account for the payment of a certain the amount of money to the bearer of the check, or by his order to another person who is indicated in the check;
- - bank draft: a bill of exchange according to which the same bank is the issuer and the payer;
- - postal order or postal payment order: small money order, which is purchased at the post office and can be paid upon request at any other post office;
- - direct debit debits through automated clearinghouses: a request to write off funds from the debtor's account, sent by the creditor on its own initiative.
Calculations based on credit transfers are (see chapter 2 in detail):
- - an order for credit transfers in giro systems (analogue in Russia - a payment order): a written instruction of the payer to his bank with an order to withdraw the amount from his account and transfer it to the beneficiary's account;
- - Instruction on crediting the account of the recipient of money in automated clearing houses (hereinafter - ARP): an instruction on crediting the account of the beneficiary, sent by the payer to the ARP on electronic media;
- - standing order: an instruction from a client to a bank to make recurring payments to a specific recipient (for example, payments for gas, electricity, etc.).
