Payment system

Financial system creating the means for transferring money between suppliers and users of funds, usually by exchanging debits or credits among financial institutions. Also known as a payment mechanism. Checks and drafts commonly are referred to as the paper based payment system; electronic fund transfers, such as Automated Clearing House debits and credits, and Fed Wire transfers, are referred to as the electronic payment system or paperless system.

A payment system is a system (including physical or electronic infrastructure and associated procedures and protocols) used to settle financial transactions in Automated teller machine networks, Stored-value card networks, bond markets, currency markets, and futures, derivatives, or options markets, or to transfer funds between financial institutions. Due to the backing of modern fiat currencies with government bonds, payment systems are a core part of modern monetary systems.

Also, Electronic Payment is a subset of an e-commerce transaction to include electronic payment for buying and selling goods or services offered through the Internet.

See also

• Real Time Gross Settlement
• Clearing house
• Clearing
• E-commerce payment systems
• Automated Clearing House
• Clearing House Interbank Payments System (CHIPS)
• Direct Deposit
• Interbank Network (ATM / EFT / POS)
• NACHA-The Electronic Payments Association

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