Also known as instant or real-time payments, fast payments are characterized by the instant transmission of the payment message and by the immediate availability of funds to the beneficiary on a 24/7/365 basis. While the user experience of fast payments is intended to be instant by design, what happens behind the scenes in terms of how funds underlying these payment transactions “move” between the payment service providers (PSPs), and how these obligations are legally extinguished, is a different and complex matter. The movement of funds between PSPs is referred to as “settlement” and is preceded by a series of steps generally referred to as “clearing.” Clearing and settlement are the core functions of a payment system, ensuring a swift, safe, and seamless flow of funds between participants.
In this webinar, Holti Banka (Senior Financial Sector Specialist, World Bank) and José Antonio García Luna (Senior Consultant, World Bank) discuss the settlement and clearing models that can be adopted by fast payment systems, and share examples of their application in multiple jurisdictions across the world.