Note: I decided to put some structure to the payment schemes in the UK as a way of learning - the original purpose of the text was just for me - but I decided to share it.
Payment systems and themes
Customer initiates payment: A payment transaction is initiated by the payer of money. Peter and John bought a £100 gift card for Maria. Peter paid the full amount upfront. John initiates the £50 payment to Peter
Customer requests a payment: A payment transaction is requested by the receiver of money. Peter and John bought a £100 gift card for Maria. Peter paid the full amount upfront. Peter asks John to pay him the £50
Auto-initiated payment: A payment transaction set up to automatically process on a specific date
Peter pays a monthly gym membership to Virgin Gym - where the monthly bill is paid at the end of the billing cycle
Digital Payments
Cards
AMEX, VISA, MasterCard
Bank Debits
Bacs, Sepa
Bank Transfers using apps
Apple Pay, Bancomat
Bank transfers using a clearing house
Faster payments, ACH payment solutions
BNPL
Klarna, AfterPay
Vouchers
Konbini
Wallets
Apple Pay
What NPA delivers?
Accessible capability for clearing and settlement
New payment products
Priority Payment
Instant Payment
Same day Payment
Multi Payment
Bulk Payment
Multi-Day Bulk Payment
Overlay services
Confirming of payee
Request to pay
Messaging standards and their role in payments
What is SWIFT (society for worldwide interbank financial telecommunication) is a vast messaging network banks used by financial institutions to quickly, accurately and securely send and receive information such as money transfer instructions.
Benefits:
Largest and most streamlined method for international payments and settlements
The payment network allows individuals and businesses to take electronic or card payments even if the customer or vendor uses a different bank than the payee
ISO20022
What is it:
International standard introduced by SWIFT for electronic data interchange between banks and financial institutions
Metadata repository containing descriptions of messages and business processes and maintenance process for the repository content
Benefits
Richer, better-structured and more granular data
A single standard that covers all business domains and end-to-end business processes - payments, securities, trade services, cards, and FX
In the MT structured message mazimisez on character set permitted
In the free format for MT individual elements cannot be retrieved without manual intervention
In MX messages distinct elements are present to capture each detail. It makes sure no information is lost and specific information if needs to be retrieved can be done quickly by processing using STP
Types of outbound payment
Types of inbound payment
E2E architecture view
