Payment systems define how value transfer are done and provide a framework of rules for
users of the system.
Payment systems connect large numbers of individuals and institutions by formalising the
process for the transfer of value and play a role in managing risks for the participants.
What Are Payment Systems?
There are many types of payment systems, but the core payment systems are:
Retail Payment Systems
Retail payments usually involve transactions between person-to-person (P2P),
between person-to-business (P2B), or between business-to-business (B2B).
Retail payment systems generally have higher transaction volumes and lower
average dollar values;
But retail payment systems are going through rapid changes, as a combination of technological innovations,
new transaction types,
And fraud drive improvements to existing systems, as well as a large number of new alternative payment methods
are being developed.
ACH (Automated Clearing House) Systems
ACH is an electronic network for bulk processing of transactions by financial institutions or processors.
ACH processes large volumes of low value credit and debit transactions in batches.
ACH credit transfers include direct deposit payroll, Social security and other government payments,
tax refunds and vendor payments.
ACH direct debit transfers include consumer payments on insurance premiums, mortgage loans
and other kinds of bills, and point-of-purchase (POP) check conversions.
Both the government and the commercial sectors use ACH payments.
ACH payments usually involve business-to-business (B2B) as well as person-to-person (P2P) and
person-to-business (P2B) payment transactions.
Wire Payment Systems
Wire transfer is a method of transferring funds electronically from one person or
institution to another.
Most wire transfer systems provide the wuickest availability of funds. Because of this, these
wire payment systems tend to process higher monetary value, time-critical transactions;
Have higher transaction costs; and have higher processing risks from a smaller volume
of payments.
A wire trasnfer can be made from one bank account number to another bank account number or
through a transfer of cash at a cash office.
Wire transfer systems are intended to provide more individualized transactions than
bulk payment systems such as ACH.
In other words, a wire transfer can be a person-to-person (P2P), a person-to-business (P2B),
or a business-to-business (B2B) payment.
Examples of e-payment systems
An example of an electronic payment system is Pay Pal.
This means anyone can accept payments online securely. Another example of e-payment systems is the use of a credit card
or debit card.
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fraud protection - PCI DSS Level 1 compliant. Hope you find this payment systems examples and explanations useful?