What Is a Payment System?
The video defines a payment system as a set of rules, accounts and networks that carry a payment from you to someone else.
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1.What does a payment system do in simple terms?
The video defines a payment system as a set of rules, accounts and networks that carry a payment from you to someone else.
2.What does a card or phone carry when you pay in a shop?
In the worked example, the card or phone only carries the payment order; the money itself is an entry in the books.
3.In the worked example, what happens to the account balances when Marge pays Leo 40?
Four entries change: Marge 460, a debt between the banks, the central bank transfer of 40, then Leo 1,040 (worked example).
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Sources (6)
- Board of Governors of the Federal Reserve System: Fedwire Funds Service - About
- European Central Bank: T2 - Eurosystem RTGS service
- European Central Bank: T2 - Facts and figures
- Deutsche Bundesbank: Oversight of payment and securities settlement systems
- Board of Governors of the Federal Reserve System: Automated Clearing House (ACH) Services
- Eigene Berechnung (synthetisches Rechenbeispiel
Education only. Not financial advice.