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a2a interoperaBility makinG moBile money scHemes interoperate

Member Banks (Bank A and Bank B):

• are commercial banks and members of the inter-bank system
• Have settlement (reserve) accounts with the settlement institution

• provide accounts and payment services for their customers
• manages the counterparty risk associated with its agency Banks
• provide liquidity to its customers (ie issue and lend money)

Agency Banks (Bank C):
• represent second-tier banks who do not have direct connection to payment system
• Have a correspondent relationship with a member Bank

• manages the counterparty risk associated with its member Banks
• provide accounts and payment services for its customers

Payer:
• sender organisation or individual
• originator of the payment instruction

Payee:

• Beneficiary for the payment.

typically, the following types of payment products are offered through inter-bank payment systems:

• Direct credit – on instruction from the payer, a single funds transfer from a payer’s bank account into the payee’s bank account
• Direct Debit – on instruction from the payee (the originator), a single or recurring funds transfer from a payer’s bank account into
the payee’s bank account
• standing order – on instruction from the payer, a recurring funds transfer from a payer’s bank account into the payee’s bank account

in any market there are likely to be number of inter-bank payment systems that has the central Bank as the settlement institution (i.e.
the lender of last resort). typically, an acH is used for lower-value payment transactions for the retail bank market. and, again typically,
higher-value payments between banks are undertaken using a real-time gross settlement (rtGs) service.

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