Useful Info You Should Know about Payment Systems

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

The majority of people surveyed use the phone to make payments. These days, paper bills are not required for travel or to go to the market. There are other options for payment. An electronic wallet, a bank card, Internet banking – all these words are well-known, but many users do not suspect how payment systems work. Given the current demand, opening a payment company can be very lucrative. 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. It is evident that the number of people who use non-cash payment systems is increasing each 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 uses both hardware and software. PS’s main advantage is its speed of operation. The transfer from one location to the next takes several days. However, orders placed online are processed instantly.

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. This is possible by connecting a third party payment system to your bank card or account, and making a transfer through it. You will immediately transfer money to the recipient, not from your bank.

Global PS function

The global payment system does not just provide transactions using bank cards. While it is the primary participant in the payment system, there are many other players that are equally important.

  • All payment systems around the globe are made possible by banks. They sign cooperation agreements and then the bank can issue payment cards.
  • All transactions are processed through this processing center. Most often, the country’s largest banks create them with the permission of their partner PS. You can locate centers in any country.
  • Acquiring banks. These banks provide the technical capability to accept 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 supervise all operations and ensure uninterrupted conduct around the globe. There are national PSs, however, that operate within the country.

PS performs three essential tasks

  • Ensure smooth operation of all components of the system
  • You can ensure that transactions are secure.
  • They provide financial protection against any possible failure in financial transactions.

However, it is essential that all payment system activities be regulated by law. That is to say, all financial transactions, as well the rules and principles for their operation, must have a legal basis.

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 system’s regulatory framework, rules and major agreements among the parties involved;
  • 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. Service is free and there are no fees to open an Account.
  2. No minimum account balance
  3. Remote identification of the client and the possibility to open an account for the company, without the need for a client visit.
  4. Remote account management
  5. It takes just 7 days to open an account.
  6. Unique/dedicated IBAN.
  7. High level of security

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

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