Bank Payments - Happiness Is

The aged common people among us may retrieve a song that was popular in the mid-1960s, by Bobby William Tecumseh Sherman titled “Happiness Is”. To quote a cardinal line from the words “happiness is different things to different people”. And this is my starting point. It is the “different things to different people” portion that is so important, especially when one sees the critical issues that environ the payments industry.

Banks have got long claimed the right to be the exclusive middleman in the payments human race – a right that they claim on the strength that they alone legally throw the accounts of people from which and to which these payments are made. Traditionally because of this banks have got been the exclusive and arbitrary determinant of what information represents a payment. Usually this is the bare minimum to fulfill the banks ain operational demands – originating and receiving banks, transmitter and receiving system account numbers, the currency and amount and the briefest of mention information.

Payment information plant for banks, but makes it really work for any other participants in the payments chain? The reply is an emphatic NO! Different participants in the payments concatenation need and would wish to have other payments related information. The ability to accomplish existent s.t.p. (Straight Through Processing) can lead to greater efficiencies in terms of operating procedures, processing times, fewer mistakes etc., etc. Inch short greater efficiency leads to reduced costs – and reduced costs enchantment increased profits. And this uses to client and banks alike.

Broadly speaking there are four users of payments related information and they all would wish to see different types of information that volition help in their ain pursuit for efficiency.

•Customers - To clients a payment is a small (but very important) portion of the business chain. Customers are seeking elaborate information that associates to its human relationship with its ain clients and with its suppliers. Single payments may affect 100s or even thousands of different transactions such as as invoices, credit and debit entry notes, returns, accommodations and so on. Accurate inside information of each of these are critical to the record keeping and the business operations.

•Banks - Banks are account keepers – and because they throw accounts or their clients’ payments and payment systems are the natural vehicles for moving finances from one account to another. Who pays, who receives, when and where, what currency and how settlement will be effected – and of course of study the client inside information too.

•Clearinghouses - Clearinghouses are the distributers of payments on a mass scale. Recent old age have got seen the rapid development and deployment of many different payment mechanisms. Often these allow for direct input signal by the client against his bank’s authorization – and the client still have got to happen another manner to go through on all that critical information that he so desperately needs.

•Banking government - Events in recent old age have forced the regulators to take a much closer look at what payments flow where in the banking world. Either the regulator himself desires the information directly or he have got made it obligatory on the banks to record, monitoring device and reserve certain inside information that associate to payments such as as AML (anti-Money Laundering) requirements.

The following legal brief verbal description summarizes the political parties from the remunerator to the donee including all the intermediaries who have an interest (and of course of study need information) on a typical payment being made through an RTGS system. Against each political party I have got briefly indicated what information they need to know.

•Sending Bank – (1) Which bank is it going to, (2) the amount, and name of the paying customer, (3) name and account inside information of the receiving customer. At the end of the procedure they may desire to also have a confirmation that the payment was made.

•RTGS system – (1) Which bank is sending, (2) which bank is receiving, (3) the amount, (4) the transaction type.

•Receiving Bank – (1) Which bank sent the payment, (2) the amount, (3) name and account inside information of the receiving customer, (4) transaction type, (5) settlement confirmation from the RTGS system.

•Payee – (1) The amount, (2) the name of the payee, (3) payer’s mention data, (4) donee mentions such as as as bill numbers, payment amendments such as credit short letters etc.

•Payer – (1) Confirmation that the payment was made and (2) the day of the month on which this occurred.

And this is just the basics! It should be clear that payments intend different things to different people.

Ah well... those 60s...

"To a preacher man it's a prayer, prayer, prayer,
To the Beatles it's a yeah, yeah, yeah,
To a banker tons and tons of dough,
To a race driver a GTO.
Happiness is, felicity is, felicity is,
different things to different people,
That's what felicity is."

(“Happiness Is” Bobby Sherman, 1965)