Here are some useful information about payment systems

The introduction of payment systems has made life easier and allowed for faster payments. Statisticians show that people have become less inclined to use cash and prefer electronic wallets or cards.

Most people use phone payments to pay their bills. Paper bills are no longer required to pay travel or go to the markets. Non-cash payments are available for everything else. An electronic wallet, a bank card, Internet banking – all these words are well-known, but many users do not suspect how payment systems work. A payment business can be very profitable, considering the current demand. If you intend to take this path, you need a banking license, in obtaining a ready-made version of which Eternity Law professionals will be happy to help you – experienced experts in the sale and purchase of companies, as well as in obtaining permits for activities.

The popularity of payment systems has been influenced by the pandemic. You can see that non-cash payments are becoming more popular every year.

The essence of the Payment System Concept

Payment system (PS), a service that allows funds to be transferred and their analogues used for computing services with shops, banks and other institutions. It is made up of hardware and software. PS has the advantage of being fast. While transfers from one place in the world can take several days, online purchases are processed immediately.

It acts as an intermediary between buyer and seller. It receives a notification from the buyer’s side and contacts the seller with information about the payment amount. This secure exchange is made using a cashless payment.

Suppose you have a bank account and want to transfer money somewhere while keeping your bank details secret, or you don’t want to go to a bank branch, but want to increase the transfer speed to instantaneous. You can link a third-party payment service to your card or bank account and transfer money through it. You will immediately transfer money to the recipient, not from your bank.

Global PS function

The global payment system provides bank card transactions, but it is more than that. It is obviously the largest participant in the process. However, there are other important players as well.

  • Banks are the foundation of all global payment systems. They sign cooperation agreements and then the bank can issue payment cards.
  • Processing center through which all transactions pass. Most often, the country’s largest banks create them with the permission of their partner PS. Any country can have a center.
  • Acquiring banks. These banks offer organizations the technical ability to take money from bank cards. We are talking about a business service – acquiring, which can be stationary, mobile or created for online platforms.

All these links lead to plastic card payment systems. They oversee all operations and ensure that they are carried out without interruption anywhere in the world. However, national PSs are still available to conduct operations within their country.

PS does three very important tasks

  • All elements must work smoothly together.
  • Transparency of transactions should be ensured
  • They provide financial protection against any possible failures in financial transactions.

It is also important that all payments systems activities are regulated by law. This means that all financial transactions as well as their rules and principles have a legal foundation.

The operating conditions of the PS are usually:

  • possible risks when using the system – what they are, who is responsible for them;
  • rights and obligations of the parties – participants and operators;
  • terms of operations – crediting and debiting, transfers to accounts or virtual wallets.

As part of the PS

  • Banks and other financial institutions that can perform financial transactions, processing or settlement operations
  • coordinator;
  • Participants. The payments are what maintain the operability and stability of the whole system.
  • The regulatory framework, rules, and principal agreements between parties involved in the system’s activities;
  • A set of communication tools and services that are responsible for technical aspects of monetary transactions.

Another Market Participant – EMI

EMIs, when compared to banks, are a much more efficient and modern way of doing business. EMI offers many benefits.

  1. No fees to open an account.
  2. No minimum account balance
  3. Remote identification of client, opening of an account for company without client visit
  4. Remote account management
  5. It takes just 7 days to open an account.
  6. Unique/dedicated IBAN.
  7. Security is high

To obtain any license in financial markets, you must be a professional specialist.

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