Payments and markets glossary

This term has two meanings. 1) In the field of transfer systems, it refers to the inclusion of a transfer order for funds or securities in a system’s operations for further processing, potentially following various checks (e.g. regarding technical standards or the availability of funds), as specified in the rules of the system. 2) In the field of cards, it refers to the process whereby a particular brand of card is accepted by a terminal, merchant or other entity.

A merchant or other entity that accepts a payment instrument presented by a client in order to transfer funds to that merchant or other entity.

See automated clearing house (ACH)

In point-of-sale (POS) transactions, the entity (usually a credit institution) to which the acceptor (usually a merchant) transmits the information necessary in order to process the card payment. In automated teller machine (ATM) transactions, the entity (usually a credit institution) which makes banknotes available to the cardholder (whether directly or via the use of third-party providers).

See position netting (advisory netting)

A contractual relationship whereby one party (the agent) acts on behalf of another (the principal).

Advisory Group on Market Infrastructures for Payments

Advisory Group on Market Infrastructures for Securities and Collateral

A system in which payments or securities are exchanged and/or cleared. Meanwhile, the ensuing monetary obligations are settled in another system, typically an RTGS system. See also real-time gross settlement (RTGS) system

application programming interface

Administration services provided by a central securities depository (CSD) or custodian in connection with the custody and/or safekeeping of financial instruments (e.g. the processing of corporate events or the handling of taxes).

See automated teller machine (ATM)

A security mechanism for verifying: 1) the identity of an individual or other entity (including verification by means of a computer or computer application); and 2) the level of authority of that person or entity (i.e. the ability of that person or entity to perform specific tasks or activities).

The consent given by a participant (or a third party acting on behalf of that participant) in order to transfer funds or securities.

A credit operation that is or can be triggered when a buyer does not have sufficient funds to settle a securities transaction in order to improve its cash position for the next settlement cycle. The credit provided can be secured using securities already held by the buyer (“collateral stocks”) or the securities that are being purchased (“collateral flows”).

An electronic clearing system in which payment orders are exchanged among participants (primarily via electronic media) and handled by a data-processing centre. See also clearing, clearing house

An electromechanical device that allows authorised users, typically using machine-readable plastic cards, to withdraw cash from their accounts and/or access other services (allowing them, for example, to make balance enquiries, transfer funds or deposit money). See also cash dispenser

A process whereby trading members may automatically link buy and sell trades by marking the respective securities trades. See also linked trade