Payment System

A payment system  is a set of rules, procedures and technical infrastructure that ensure the transfer of value from one economic entity to another. Payment systems are one of the key parts of modern monetary systems.

Payment systems are a substitute for cash payments when making domestic and international payments and are one of the basic services provided by banks and other specialized financial institutions.

It is usually understood that money is transferred through payment systems . From a legal point of view, in most cases there is a transfer of debt: the funds that the payment system owes to one of the clients, it becomes owed to another client. When the first client transfers his money to the payment system, the amount of such transfer is recorded, that is, the amount of debt to the first client. By his order, the client can indicate that the payment system now owes not to him, but to the second client. When the second client contacts the payment system, he has the opportunity to receive the cash equivalent of such a debt. In some cases, the means of payment are not money or debts denominated in money, but conventional units of payment or specialized securities (an example is WMR, Bitcoin).

Extended forms of payment systems (including physical or electronic infrastructure and associated procedures and protocols) are conducting financial transactions using ATMs , payment kiosks , POS terminals , stored value cards ; electronic wallets; conducting transactions in foreign exchange markets, futures , derivatives and options markets . Some payment systems include credit mechanisms, but these should be considered outside of the payment systems aspect.

Electronic payment systems are a subtype of payment systems that provide electronic payment transactions via networks (for example, the Internet ) or payment chips.

Real-time settlement system

The development of modern technologies has led to the creation of national payment systems with the participation of central banks, which has become a serious factor in anti-crisis work in the financial market.

If in 1985 only 3 central banks introduced the Real -Time Gross Settlement System (RTGS ), then at the beginning of the 21st century their number exceeded 90. According to the forecast, only 1 percent of central banks will not introduce RTGS by 2020. The introduction of this system has become one of the criteria for the innovative characteristics of the central bank, since with their help such public goals as financial stability and crisis preparedness are achieved. With such innovative assessments, such an essential element as the amount of investment in the information and technological capabilities of the system (Information and Communication Technologies - ICT), which must have an economic justification, is also important.

At the same time, the ratio of the number of central bank employees to the total population of the country is, in their opinion, one of the criteria for the speed of implementation of RTGS. At the same time, they probably link the size of the apparatus with the bureaucratization of the work of the central bank and its own insufficient provision of internal technological systems to reduce the number of employees. The European Central Bank has made the presence of RTGS a prerequisite, so not only the countries of the European Union, but also the rest of the European countries gravitating towards it, have implemented this system.

Central banks are implementing RTGS in order to improve the efficiency of national financial markets, primarily through reducing the risk of non-payments. Researchers identify four main reasons for central banks to implement the RTGS system:

• this is necessary for the competitiveness of national markets in the context of global competition to attract investment;
• the implementation of RTGS allows you to combine payments with payment systems of other countries, if necessary;
• this helps in establishing similar RTGS in countries with long-standing historical trade ties (such as CIS countries) and allows them to help them establish and update their own payment systems;
• You can save yourself the effort and use the services of companies available on the international market that specialize in installing national RTGS.

The organization of the payment system should not lag behind its current level of technological development and should be updated in order to maintain its effectiveness in reducing or eliminating financial settlement risks of the national economy. Claims for an international financial center that are not supported by an advanced and competitive payment system compared to other countries have no realistic basis. The technological efficiency of the payment system determines the efficiency with which money is used in the national economy and reduces the risks in settlements.

As an indicator of the effectiveness of the action and anti-crisis readiness of the payment system, the number of daily payments made under RTGS must be at least 20% of the total number of payments and at least 95% of the number of large payments. The national payment system should be unified and not differentiated at the national and regional levels.