Payment Systems. From the Salt Mines to the Board Room. Dominique Rambure. and. Alec Nacamuli. palgrave. macmillan

Transcription

1 Payment Systems From the Salt Mines to the Board Room Dominique Rambure and Alec Nacamuli palgrave macmillan

2 Contents List of Figures xi List of Tables. xiii Acknowledgements xiv Foreword by Gerard Hartsink xv Commonly Used Abbreviations and Acronyms xvii Introduction xxi Part I The Structure and Economics of Payment Systems 1 The Architecture of Payment Systems 3 1 Introduction and basic concepts 4 2 Participants in a payment system 7 3 Payment operations 13 4 Standards 19 5 Efficiency criteria for payment systems 20 2 Payment Instruments 23 1 Characteristics of payment instruments 23 2 Cash 25 3 Cheques 26 4 Credit transfers / 28 5 Direct debits 30 6 Cards 32 7 Payment channels 38 8 Statistics and comparative trends 39 3 Cross-Currency Payments and SWIFT 43 1 Correspondent banking 43 2 The SWIFT network 46 3 The correspondent banking and clearing business 49 4 Remittances 49

3 viii Contents 4 Risks in Payment Systems, Oversight and Security 52 1 Analysis of risks in payment systems 53 2 Risk management 55 3 Regulatory oversight 62 4 Fraud prevention, security and anti money laundering 63 5 The Role of Payment Systems in the Economy 69 1 The economic role of payment systems 69 2 Payment systems and money velocity 70 3 Network economics 72 Part II Overview of Current Payment Systems 6 European Payments and SEPA 77 1 SEPA 77 2 The Payment Services Directive (PSD) 79 3 The TARGET2 RTGS system 81 4 Clearing and settlement mechanisms (CSMs) 86 5 The EBA payment systems 86 6 The SEPA schemes and frameworks 88 7 Business and operational impact of SEPA 91 8 The UK payment systems 96 7 The US Payment Systems Fedwire The Federal Reserve national settlement system CHIPS The ACH Network Cheques Cards /' Trends Overview of the US securities clearing and settlement systems Major Asian Payment Systems Payment and securities clearing and settlement systems in Japan Payment and securities settlement systems in China and Hong Kong SAR 121

4 Contents ix New Entrants 1 Remittance service providers 2 Non-bank issued credit cards 3 Transport cards 4 Mobile phones and mobile payments 5 Paypal 6 Earthport Part III The Settlement of Trading Activities 10 The Settlement of Foreign Exchange Trades and CLS The settlement of foreign exchange trades and settlement risk CLS CLS operating procedures and timetable Risk and liquidity management in CLS Market and business impact of CLS Securities Settlement Securities clearing and settlement systems Risks in securities settlement systems Settlement risk management Consolidation of exchanges and the clearing and settlement landscape TARGET2-Securities 156 Part IV Wholesale Payment, Cash Management and Trade Facilitation Services 12 The Requirements of Corporations The role of the treasury department Electronic invoicing Supply chain finance (SCF) Corporate Banking Services Electronic banking and communication channels Reporting, cash management and treasury services Electronic invoicing and supply chain financing services Fees and remuneration Selection criteria 175

5 ,x Contents Part V Banks and the Payments Business 14 The Banks'Back Offices Payment processing and STP Departments involved Operations IT systems Payments as a Business for Banks Payments within banks' overall strategy The economics and profitability of payments services Organization and governance Development of an enterprise-wide payments strategy 190 Part VI The Future 16 Where is the Payments Industry Going? Instruments Payment systems architectures, schemes, standards and operators Risk and fraud management Governance and oversight Settlement of financial markets trading Regional developments Corporate banking New entrants Operations Revenue shifts and shrinkage 203 Conclusion 205 Appendix 207 Notes 208 Bibliography and Useful Websites 213 Glossary 216 Index 229