Payment Systems: From the Salt Mines to the Board Room

251 Pages·2008·2.28 MB·English

by  Dominique Rambure, Alec Nacamuli (auth.)

PalgraveMacmillanStudiesinBankingandFinancialInstitutions
SeriesEditor:ProfessorPhilipMolyneux
ThePalgraveMacmillanStudiesinBankingandFinancialInstitutionsareinter-
nationalinorientationandincludestudiesofbankingwithinparticularcountries
orregions,andstudiesofparticularthemessuchasCorporateBanking,RiskMan-
agement,MergersandAcquisitions,etc.Thebooksfocusonresearchandpractice,
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thathaveglobalimpactandinfluence.
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ITANDEUROPEANBANKPERFORMANCE
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EMERGINGBANKINGSYSTEMS
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FINANCIALEXCLUSION
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NEWDRIVERSOFPERFORMANCEINACHANGINGFINANCIALWORLD
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Competition,Efficiency,PerformanceandRisk
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FRAMEWORK
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DEVELOPMENTSINISLAMICBANKING
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MICROFINANCE
PhilipMolyneuxandMunawarIqbal
BANKINGANDFINANCIALSYSTEMSINTHEARABWORLD
PhilipMolyneuxandEleuterioVallelado(editors)
FRONTIERSOFBANKSINAGLOBALWORLD
AnastasiaNesvetailova
FRAGILEFINANCE
Debt,SpeculationandCrisisintheAgeofGlobalCredit
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PAYMENTSYSTEMS
FromtheSaltMinestotheBoardRoom
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HONGKONGSAR’sMONETARYANDEXCHANGERATECHALLENGES
HistoricalPerspectives
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THEVENTURECAPITALINDUSTRYINEUROPE
AlfredSlager
THEINTERNATIONALIZATIONOFBANKS
NoelK.Tshiani
BUILDINGCREDIBLECENTRALBANKS
PolicyLessonsforEmergingEconomies
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Payment Systems
From the Salt Mines to the Board Room
DominiqueRambure
and
AlecNacamuli
©DominiqueRambureandAlecNacamuli2008
Foreword©GerardHartsink2008
Softcover reprint of the hardcover 1st edition 2008 978-0-230-20250-4
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Firstpublished2008by
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LibraryofCongressCataloging-in-PublicationData
Rambure,Dominique.
Paymentsystems:fromthesaltminestotheboardroom/
DominiqueRambure,AlecNacamuli.
p.cm.–(PalgraveMacmillanstudiesinbankingandfinancial
institutions)
Includesbibliographicalreferencesandindex.
1. Payment. 2. Clearinghouses(Banking). 3. Banksand
banking,Central. I.Nacamuli,Alec,1943–II.Title.
HG1692.R34 2008
332.1’78—dc22 2008026093
10 9 8 7 6 5 4 3 2 1
17 16 15 14 13 12 11 10 09 08
Toourfamilies
‘In the theory of money, it is curious and worth noting that its
usage was first considered progress and that, once it existed,
gettingridofitwasconsideredfurtherprogress.’
LéonWalras(1834--1910)Théoriedela
circulationetdelamonnaie(1900)
Contents
ListofFigures xi
ListofTables xiii
Acknowledgements xiv
ForewordbyGerardHartsink xv
CommonlyUsedAbbreviationsandAcronyms xvii
Introduction xxi
PartI TheStructureandEconomicsofPayment
Systems
1 TheArchitectureofPaymentSystems 3
1 Introductionandbasicconcepts 4
2 Participantsinapaymentsystem 7
3 Paymentoperations 13
4 Standards 19
5 Efficiencycriteriaforpaymentsystems 20
2 PaymentInstruments 23
1 Characteristicsofpaymentinstruments 23
2 Cash 25
3 Cheques 26
4 Credittransfers 28
5 Directdebits 30
6 Cards 32
7 Paymentchannels 38
8 Statisticsandcomparativetrends 39
3 Cross-CurrencyPaymentsandSWIFT 43
1 Correspondentbanking 43
2 TheSWIFTnetwork 46
3 Thecorrespondentbankingandclearingbusiness 49
4 Remittances 49
vii
viii Contents
4 RisksinPaymentSystems,OversightandSecurity 52
1 Analysisofrisksinpaymentsystems 53
2 Riskmanagement 55
3 Regulatoryoversight 62
4 Fraudprevention,securityandantimoneylaundering 63
5 TheRoleofPaymentSystemsintheEconomy 69
1 Theeconomicroleofpaymentsystems 69
2 Paymentsystemsandmoneyvelocity 70
3 Networkeconomics 72
PartII OverviewofCurrentPaymentSystems
6 EuropeanPaymentsandSEPA 77
1 SEPA 77
2 ThePaymentServicesDirective(PSD) 79
3 TheTARGET2RTGSsystem 81
4 Clearingandsettlementmechanisms(CSMs) 86
5 TheEBApaymentsystems 86
6 TheSEPAschemesandframeworks 88
7 BusinessandoperationalimpactofSEPA 91
8 TheUKpaymentsystems 96
7 TheUSPaymentSystems 103
1 Fedwire 104
2 TheFederalReservenationalsettlementsystem 105
3 CHIPS 105
4 TheACHNetwork 107
5 Cheques 108
6 Cards 109
7 Trends 110
8 OverviewoftheUSsecuritiesclearingand
settlementsystems 112
8 MajorAsianPaymentSystems 114
1 Paymentandsecuritiesclearingandsettlement
systemsinJapan 115
2 PaymentandsecuritiessettlementsystemsinChina
andHongKongSAR 121
Contents ix
9 NewEntrants 130
1 Remittanceserviceproviders 130
2 Non-bankissuedcreditcards 131
3 Transportcards 131
4 Mobilephonesandmobilepayments 132
5 Paypal 134
6 Earthport 135
PartIII TheSettlementofTradingActivities
10 TheSettlementofForeignExchangeTradesandCLS 139
1 Thesettlementofforeignexchangetradesand
settlementrisk 139
2 CLS 142
3 CLSoperatingproceduresandtimetable 144
4 RiskandliquiditymanagementinCLS 145
5 MarketandbusinessimpactofCLS 146
11 SecuritiesSettlement 148
1 Securitiesclearingandsettlementsystems 149
2 Risksinsecuritiessettlementsystems 150
3 Settlementriskmanagement 151
4 Consolidationofexchangesandtheclearingand
settlementlandscape 152
5 TARGET2-Securities 156
PartIV WholesalePayment,CashManagementand
TradeFacilitationServices
12 TheRequirementsofCorporations 161
1 Theroleofthetreasurydepartment 162
2 Electronicinvoicing 165
3 Supplychainfinance(SCF) 168
13 CorporateBankingServices 172
1 Electronicbankingandcommunicationchannels 172
2 Reporting,cashmanagementandtreasuryservices 173
3 Electronicinvoicingandsupplychainfinancingservices 174
4 Feesandremuneration 174
5 Selectioncriteria 175