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Payment Systems Definition

Glossary	Definition
ATM	Automated Teller Machine An electromechanical device that permits authorized users, typically using machine-readable plastic cards, to withdraw cash from their accounts and/or access other services, such as balance enquiries, transfer of funds or acceptance of deposits. ATMs may be operated either online with real-time access to an authorization database or offline.
BAHTNET	Bank of Thailand Automated High-value Transfer Network A payment system supporting the transfer of large value payments between member institutions.
Bill for Collection	A cheque was sent for collection across different clearing houses.
Cheque	A written order from one party (the drawer) to another (the drawee, normally a bank) requiring the drawee to pay a specified sum on demand to the drawer or to a third party specified by the drawer. Cheques may be used for settling debts and withdrawing money from banks.
Cheque Truncation	The process that payer bank send a digital image which included information and signature of payer to issuer bank to verify for the completion of check. This process brought to replace the process that cheque was usually sent to issuer bank.
Clearing	The process of transmitting, reconciling and, in some cases, confirming payment orders or security transfer instructions prior to settlement, possibly including the netting of instructions and the establishment of final positions for settlement. Sometimes the term is used (imprecisely) to include settlement.
Clearing System	A set of procedures whereby financial institutions present and exchange data and/or documents relating to funds or securities transfers to other financial institutions at a single location (clearing house). The procedures often also include a mechanism for the calculation of participants’ bilateral and/or multilateral net positions with a view to facilitating the settlement of their obligations on a net or net basis.
Credit Card	A card indicating that the holder has been granted a line of credit. It enables the holder to make purchases and/or withdraw cash up to a prearranged ceiling; the credit granted can be settled in full by the end of a specified period or can be settled in part, with the balance taken as extended credit. Interest is charged on the amount of any extended credit and the holder is sometimes charged an annual fee.
Credit Transfer	A payment order or possibly a sequence of payment orders made for the purpose of placing funds at the disposal of the beneficiary. Both the payment instructions and the funds described therein move from the bank of the payer/originator to the bank of the beneficiary, possibly via several other banks as intermediaries and/or more than one credit transfer system.
Debit Card	Card enabling the holder to have his purchases directly charged to funds on his account at a deposit-taking institution.
Digital Signature	An electronic data which retrieve from PIN, see Personal Identification Number, of sender. The owner of Digital Signature unable to decline in case of sending a wrong data.
Direct Credit	Preauthorized credit on the payer’s bank account which transfer to payee’s bank account initiated by the payer.
Direct Debit	Preauthorized debit on the payer’s bank account initiated by the payee.
ECS	Electronic Cheque Clearing System A cheque clearing system between two financial institutions through electronic device that able to read data on cheque then send data to clearing house for net settlement on balance sheet.
EDC	Electronic Data Capture A computerized system designed for approval or rejection for credit transaction, which normally the card issuer installed at the point of sell.
Electronic Money	Value stored electronically in a device such as a chip card or a hard drive in a personal computer.
MICR	Magnetic Ink Character Recognition A technique, using special MICR machine-readable characters, by which documents (ie cheques, credit transfers, direct debits) are read by machines for electronic processing.
ORFT	On-line Retail Funds Transfer A development of the ATM system in which inter-bank retail funds transfer can be performed through an inter-bank network using the ATM platform.
PIN	Personal Identification Number A numeric code which the cardholder may need to quote for verification of identity. In electronic transactions, it is seen as the equivalent of a signature.
Pre-authorized	An agreement between customer and bank to access direct debit or direct credit transaction on customer’s bank account.
Prepaid Card	A card on which value is stored, and for which the holder has paid the issuer in advance.
RTGS	Real Time Gross Settlement The continuous (real-time) settlement of funds or securities transfers individually on an order by order basis (without netting).
SMART	System for Managing Automated Retail Funds Transfer A payment system that facilitates for interbank funds transfer of retail customers by electronic system; such as payroll, dividend, etc.
Settlement	An act that discharges obligations in respect of funds or securities transfers between two or more parties.
Smart Card	An integrated circuit card with a microprocessor, capable of performing calculations. Smart cards are being used for identification and to encode information such as a person’s identity record.
S.W.I.F.T.	Society for Worldwide Interbank Financial Telecommunication A cooperative organization created and owned by banks that operates a network which facilitates the exchange of payment and other financial messages between financial institutions (including broker-dealers and securities companies) throughout the world. A SWIFT payment message is an instruction to transfer funds; the exchange of funds (settlement) subsequently takes place over a payment system or through correspondent banking relationships.
Systemic Risk	The risk that the failure of one participant in a fund transfer system, or in financial markets generally, to meet its required obligations will cause other participants or financial institutions to be unable to meet their obligations (including settlement obligations in a transfer system) when due. Such a failure may cause significant liquidity or credit problems and, as a result, might threaten the stability of financial markets.
URL	Uniform Resource Locator The address of a web page on world wide web
Zero-hour rule	A provision in the insolvency laws of some countries whereby any transactions of a closed institution which take place after midnight on the date on which the institution was ordered closed would be void.