Clearing and Settlement Arrangements for Retail Payments in Selected Countries

Foreword

This report has been produced by the Working Group on Retail Payment Systems on behalf of the Committee on Payment and Settlement Systems (CPSS) of the central banks of the Group of Ten countries. The aim of the report is to contribute to a better understanding of retail payment systems across the G10 countries and Australia. It is the second CPSS report on retail payment systems; the first - "Retail Payments in Selected Countries: A Comparative Study" - was published in September 1999. That report, which focused on retail payment instruments and end user markets, is complemented by the present report, which analyses the clearing and settlement arrangements for retail payments in the same group of countries.

While the previous report pointed out that retail payment instruments are diverse both within and among the selected countries, the analysis provided in this report shows that a number of similarities exist in the structure of clearing and settlement arrangements in the G10 countries and Australia. In particular, the same type of clearing and settlement arrangements, namely multilateral clearing and settlement systems, are in use in all countries. In some countries, correspondent and central bank arrangements also play an important role. In addition to this, nearly all countries have dedicated clearing arrangements for credit cards and sometimes debit cards.

Recent developments in end user markets, such as the growth of electronic commerce and the emergence of new payment instruments and methods, have increased the demand for new clearing services in some countries. The application of information and communications technology to payment processes has made it possible to meet the increasing and more demanding needs of end users. The availability of new products and communication and delivery channels, such as the internet, has allowed financial institutions to review their distribution strategy and has given customers the possibility to choose from a wider variety of payment services. Although it is very difficult to say at this point where this evolution will lead, it does highlight the dynamic nature of retail payment systems.

Mr Tresoldi, his predecessor Mr Lo Faso, and the members of the Working Group are to be commended for the analysis which they have carried out. The active contribution which the CPSS Secretariat at the BIS has made to drafting the report is acknowledged, as well as the able assistance provided by the BIS in editing and publishing the report.

Tommaso Padoa-Schioppa, Chairman
Committee on Payment and Settlement Systems
Member of the Executive Board, European Central Bank