Glossary

Glossary


 

TermDescription
Affiliates (in an interbank system)Service‑users and other interested parties who are members of the Electronic Payments Affiliates Group (for Bacs and Faster Payments) or the CHAPS Affiliates Group
Agency AgreementSee Sponsor Agreement
Agency BankFor the purposes of this website, this refers to a credit institution that is an Indirect PSP
ATM (Automated Teller Machine)A device that enables users, typically using machine-readable plastic cards, to withdraw cash from their accounts and/or access other services
BacsThe payment system which processes payments through two principal electronic payment schemes: Direct Debit and Bacs Direct Credit. The payment system is operated by BPSL
The BankThe Bank of England
BanksFor the purposes of this website, the term ‘banks’ refers more generally to both banks and building societies.
BBCCLBelfast Bankers’ Clearing Company Ltd – the Operator of the system for processing cheques and paper credits in Northern Ireland.
BPSLBacs Payment Schemes Ltd – the Operator of the Bacs payment system.
C&CCC (Cheque & Credit Clearing)The payment system in England, Scotland and Wales that processes cheques and other paper instruments. It is operated by C&CCC.
CHAPSThe Clearing House Automated Payment System (CHAPS) is the UK’s real-time, high-value sterling payment system, where payments are settled over the Bank's RTGS system. It is operated by CHAPS Co.
CHAPS CoCHAPS Clearing Company Ltd – the Operator of the CHAPS payment system.
ChequeA written order from an account holder instructing their bank to pay a specified sum of money to one or more named beneficiaries (The Bills of Exchange Act 1882)
ClearingThe process of transmitting, reconciling and, in some cases, confirming transfer orders prior to settlement, potentially including the netting of orders and the establishment of final positions for settlement.
Current Account Switch Service (CASS)The Current Account Switch Service is a free service that lets you switch your current account from one participating bank or building society to another. It has been designed to be simple, reliable and hassle-free and is backed by the Current Account Switch Guarantee. www.simplerworld.co.uk
Direct AccessAs under s.42(6) FSBRA, a PSP has Direct Access to a payment system if the PSP is able to provide services for the purposes of enabling the transfer of funds using the payment system as a result of arrangements made between the PSP and the Operator. For the purposes of this website, ‘arrangements’ refers to the following: In the case of Bacs, Cheque and Credit Clearing Company, CHAPS Co, and Faster Payments, the arrangements are made between the PSP and the Operator. In the cases of LINK and NICC we also consider that Direct Access is the result of the following arrangements: In the case of LINK (and because of LINK’s particular organisation model), the arrangements are made between the PSP, the other existing Direct PSPs and the Infrastructure Provider to the LINK payment system (VocaLink). In the case of NICC, the arrangements are made between the PSP and the other existing Direct PSPs.
Direct Agency AccessThis describes the specific situation where an Indirect PSP has Direct Technical Access arrangements for Faster Payments, by securing direct technical access through a third-party provider, without becoming a member of Faster Payments. In this scenario the PSP uses a Sponsor Bank for the provision of settlement services.
Direct CreditThe Bacs scheme by which a person or entity can transfer funds electronically, directly into a specified bank account (e.g. paying salaries).
Direct DebitThe Bacs scheme for collecting pre-authorised debits on the payer's bank account, which are initiated by the payee.
Direct PSPA PSP that has Direct Access.
Direct Technical AccessThe manner in which a PSP technically connects directly with either a payment system Infrastructure Provider or an Operator in order to enable the transfer of funds. For the purposes of this website, Direct Technical Access does not include the settlement of funds.
EMI (Electronic Money Institution)A person that has been granted authorisation under a national legislation implementing title II of the Electronic Money Directive (2009/110/EC) including, for the avoidance of doubt, a person who has been granted a waiver from full authorisation and been registered in accordance with Article 9 Electronic Money Directive (a ‘small EMI’).
End-userA person (or business) who is a payee or payer.
FPS (Faster Payments Service)The payment system that provides real-time payments as well as standing orders. It is operated by FPSL.
FPSL (Faster Payments Scheme Ltd)The Operator of the Faster Payments payment system.
FSBRAFinancial Services Banking Reform Act
Indirect AccessFor the purposes of this website, a PSP has Indirect Access to a payment system if it has a contractual arrangement with a Direct PSP to enable it to provide services (for the purposes of enabling the transfer of funds using that payment system) to persons who are not participants in the system.
Indirect PSP (IPSP)A PSP that has Indirect Access. 
Infrastructure ProviderAs under s.42(4) FSBRA, any person who provides or controls any part of the infrastructure used for the purposes of operating a payment system.
Interbank payment system (or interbank system)The Bacs, Cheque and Credit Clearing Company, CHAPS Co, Faster Payments, LINK and NICC payment systems (i.e. it does not include card payment systems).
ISO 20022An international financial messaging standard that is being introduced into a number of payment systems.
LINKThe payment system which enables end-users to take cash out of theiraccounts (amongst other activities) using the network of ATMs in the UK. It is operated by LINK Scheme.
LINK SchemeThe Operator of the LINK payment system. The LINK Scheme does not itself install or operate cash machines. mobile payment service A payment service made available through a mobile device (e.g. a smart phone).
NICCNorthern Ireland Cheque Clearing - The payment system in Northern Ireland that processes cheques and other paper instruments. It is operated by BBCCL.
Operator (Payment System Operator)As under s.42(3) FSBRA, in relation to a payment system, Operator means any person with responsibility under the system for managing or operating it; and any reference to the operation of a payment system includes a reference to its management.
Participants in Payment SystemsAs under s.42(2) FSBRA, includes Operators, PSPs and Infrastructure Providers.
PayeePerson (or business) receiving a payment
PayerPerson (or business) initiating a payment
PaymA service that enables person-to-person payments to be made using mobile phone numbers as a proxy for sort code and account number. www.paym.co.uk
Payment ProcessingThe performance of the actions required, in accordance with the rules of a payment system, for the handling of a transfer of funds from the point of acceptance by the system to the point of discharge from the system. Processing may include initiation, clearing, sorting, netting, and/or matching.
Payment SystemAs under s.41 FSBRA, a payment system is a system which is operated by one or more persons in the course of business (for the purpose of enabling persons to make transfers of funds), and includes a system which is designed to facilitate the transfer of funds using another payment system. Limited exclusions are set out in s.41(2) and (3) FSBRA. Only payment systems which are designated by the Treasury are ‘regulated payment systems’.
Payment Systems InfrastructurePayment systems infrastructure is the hardware, software, connections and operating environments that support the clearing and/or settlement of a payment or funds transfer request after it has been initiated. For the purposes of this website, ‘payment systems infrastructure’ refers collectively (and individually) to: (i) Central Infrastructure and other infrastructure within Operators or provided to Operators (ii) payments-related infrastructure within PSPs or provided to PSPs (iii) payments-related infrastructure provided to service‑users for the purpose of enabling the transfer of funds using a payment system.
PSP (Payment Service Provider)As under s.42(5) FSBRA, a PSP, in relation to a payment system, means any person who provides services to persons who are not participants in the system for the purposes of enabling the transfer of funds using the payment system. For the purposes of this website, this includes Direct PSPs and Indirect PSPs.
RTGS (Real Time Gross Settlement)The continuous (real-time) settlement of funds transfers individually on an order-by-order basis. Each individual payment is settled in real time across the settlement accounts of Direct PSPs.
RTGS (of the Bank of England)The Bank of England’s system for continuous (real-time) settlement of funds transfers.
Service-userAs under s.68(1) FSBRA, service-user means those who use, or are likely to use, services provided by payment systems.
SettlementThe discharge of obligations in respect of funds owing between two or more participants in a payment system.
Settlement AccountAn account which is used to settle transactions between participants in some payment systems.
Sponsor AgreementAn agreement in which an Indirect PSP obtains access to one or more payment systems through a Sponsor Bank. (Also referred to as an Agency Agreement.)
Sponsor BankA Direct PSP that provides other PSPs with Indirect Access for the purpose of enabling the transfer of funds within the UK.
Standing OrderAn instruction from a payer to their PSP to pay a set amount at regular intervals to the payee’s account. The majority of Standing Orders are made through Faster Payments.
Technical AccessThe manner in which a PSP technically connects with either a payment system Infrastructure Provider, an Operator, a Sponsor Bank or a third-party service provider in order to enable the transfer of funds. For the purposes of this website, technical access does not include the settlement of funds.