Payment Systems

An Overview

We are living in a wired world and soon in a wireless world. Zillions of financial transactions are happening at any moment of time across the globe. All this requires vibrant and robust system

which can handle these mammoth transactions in the most efficient way such that not even a cent is leaked here or there. This need forced use to invent efficient payment systems , by payment system we mean various processes, procedures and means to settle financial transactions in financial markets like equity, debt, futures, options etc.

As the technology becomes more easy to use and less costly, these payment systems are becoming more affordable and today almost forming an inevitable part of any financial transactions. These payment systems are mainly used by banks and other financial institutions (NBFC’s) , but due to large amount of trading happening electronically many online shopping/trading organizations also use them. The largest payment system which is currently operating in the world is Newyork’s Clearing House Interbank Payment Systems (CHIPS). Other well known payment system which is catching up these days is Real Time Gross Settlement System (RTGS) which is used by bank to settle the financial transactions in real time. Some other systems which created disruption in part are demat systems which help in dematerializing securities and equities and thus enabling electronic trading and settlement.

With the fast and dynamic changing world where we see changing in currencies for different countries (ex Euro) , financial activity is on all time high, frequently newer financial instrument coming and at the same time lot of security threats clouding the electronic world, to address all these issues we will require payment systems which can easily adapt to the future changes and are scalable to future demand. So “Managing Change” is the new age mantra for these payment systems.