Category Archives: Payments

Learn #banking, #fintech and #payments jargon: Counterparty risk

By | August 1, 2021

Counterparty risk Definition: Counterparty risk is the risk of one or more parties in a financial transaction defaulting on or otherwise failing to meet their obligations on that trade. Details: Thre are several degrees of risk involved in financial transactions between financial institutions depending on the type of payment rail involved. In critical RTGS systems… Read More »

Learn #banking, #fintech and #payments jargon: Credit Limit Check

By | July 23, 2021

Credit Limit Check Definition: The process of verification if an account may be debited or credited in a settlement system. Details: If the amount to be debited in the payment message is equal or less than the balance on the sender’s correspondent account than the credit check limit passes. If the amount to be credited… Read More »

Learn #banking, #fintech and #payments jargon: Bulk Payment Instruction

By | July 23, 2021

Bulk Payment Instruction Definition: A set of payment orders delivered together for processing which may be destined for several receivers. Details: Bulk payment instructions are payment instructions delivered to the clearing and settlements system as bulk files and are processed together ordered after some criteria containing at least the same sender and receiver. Note that… Read More »

Learn #banking, #fintech and #payments jargon: Payment versus payment (PvP)

By | July 22, 2021

Payment versus payment (PvP) Definition: A settlement mechanism that ensures that the final transfer of a payment in one currency occurs if and only if the final transfer of a payment in another currency or currencies takes place. see Principles for financial market infrastructures https://www.bis.org/cpmi/publ/d101.htm Details: PvP is in fact a cross-border cross-currency unitary operation.… Read More »

Learn #banking, #fintech and #payments jargon: Correspondent banking network

By | July 21, 2021

Correspondent banking network Definition: Correspondent banking is an arrangement whereby one bank (correspondent) holds deposits owned by other banks (respondents) and provides those banks with payment and other services (CPMI (2016)). Correspondent banking networks are critical for firms and households that conduct business or send payments internationally. Correspondent banking – final report https://www.bis.org/cpmi/publ/d147.htm Details: Correspondent… Read More »

Learn #banking, #fintech and #payments jargon: Cross-border payments

By | July 21, 2021

Cross-border payments Definition: Cross-border payments are those type of payment where the payer and payee reside in different jurisdictions. Many of these are also cross-currency payments – that is, payments where the payer and payee are respectively debited and credited in different currencies. Payments within monetary unions or payments in a common invoice currency may… Read More »

Learn #banking, #fintech and #payments jargon: Repurchase Agreement (Repo)

By | July 21, 2021

Repurchase Agreement (Repo) Definition: An agreement in which money is lent against securities with a change in beneficial ownership, on the basis that they will be bought back at the end of the day or on a later date. This process may be automated. Details: Repos are typically used to raise short-term capital to meet… Read More »

Learn #banking, #fintech and #payments jargon: Deferred Net Settlement System (DNS)

By | July 20, 2021

Deferred Net Settlement System (DNS) Definition: A bilateral or multilateral net settlement system where settlement takes place on a net basis after many transactions have been processed, in which there is a time lag between acceptance of payment and its actual settlement. Details: This type of payment system is also called batch settlement system. Payments… Read More »

Knoll’s law of media accuracy in #fintech #payments #banking

By | July 10, 2021

Definition Everything you read in the newspapers is absolutely true, except for the rare story of which you happen to have firsthand knowledge. Details: Too many people use some terms without understanding them beyond the definition. Too many “experts” use the terms but they never had experience with the actual implementation of anything in #banking,… Read More »

Learn #banking, #fintech and #payments jargon: #CBDC or Central Bank Digital Currency

By | July 22, 2021

CBDC Definition: The CPMI (BIS – Committee on Payments and Market Infrastructures) defines a CBDC as “a digital form of central bank money that is different from balances in traditional reserve or settlement accounts.” A CBDC can leverage cryptotechnologies such as DLT/blockchain or be based on a centralised database. A CBDC can also be general… Read More »