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Payment Systems > About Payment Systems > Risks in Payment Systems
Service Manager      Supanee (66(0)2283-6850)   
  Risks in Payment Systems 
 
Risks in payment systems refer to the possibility of payments being incomplete. The impact can be measured in terms of damaging value or level of confidence in payment systems. For example, in case of incorrect or delayed payments, there are costs arising from transferring funds back, interest charges, replacement costs and other types of charges. In case of not receiving or receiving partial payments, there will be a principal loss, while in some cases, which involve high value payments or payment participants at large, this may cause systemic risks among financial institutions and eventually affect the stability of the financial system.

Such risks generally exist in the payment systems that are not settled on a real-time basis i.e. net settlement systems, whereby the longer the time difference between payment and settlement time, the higher the risk exposure it is. Moreover, the risks will also depend on the volume and value of transactions in the payment system.

Causes of payment system risks vary to the type of risks, major causes are counter party risk i.e., Liquidity and Credit Risks.

More details on risks in the payment systems can be found at http://www.bis.org.

 

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