Page 51 - A2A-interoperability_Online
P. 51
a2a interoperaBility makinG moBile money scHemes interoperate
the typical transaction functionality of an acH processor is straightforward. it receives transactions instructions, verifies and routes them
to the correct bank and notifies the originator of the outcome. this is illustrated below:
ACH
Approve
NOTIFy
BANK A BANK B
vErIFy & rOUTE
Submit
Figure 10: ACH Transaction Functions
the time interval for settlement of the transactions processed through the acH depends on the capabilities of the rtGs – where the
actual funds associated with the transaction instructions are settled between the banks. if the rtGs is not capable of intra-day settle-
ment, then acH settlement cannot be intra-day. the frequency for acH transaction settlement depends on the period supported by
the settlement institution’s rtGs.
payments between the central Bank and the member Banks are via settlement or reserve accounts at the central Bank, and, typically,
count as part of their overall liquidity ratios.
in some schemes, the acH is allocated a settlement account at the central Bank and sends instructions to pay against that account.
therefore, in this case, the payer’s Bank pays (the net settlement amount) into the acH settlement account from its account at the cen-
tral Bank and the acH pays into the payee’s Bank account at the central bank.
in some markets (notably the uk), there are multiple acH systems. legacy acH systems, operated using a batched next day transac-
tion settlement approach, continue to be used for direct debit instructions for utility and regular bill payments, which have a very much
higher volume than is required for direct credits. Here, direct credits operate on a separate system to an intra-day settlement cycle. Both
transactional systems use the central bank as the settlement institution. (note: the environment in the us is more complicated as they
have multiple Federal reserve Banks under the Federal reserve.)
the separation of rtGs and acH means that each system can be operated by different organisations. as the acH is a transaction netting
operation it is a technical operation and is often run on an outsourced arrangement from the payment system ‘owner’ (ie the members).
48
the typical transaction functionality of an acH processor is straightforward. it receives transactions instructions, verifies and routes them
to the correct bank and notifies the originator of the outcome. this is illustrated below:
ACH
Approve
NOTIFy
BANK A BANK B
vErIFy & rOUTE
Submit
Figure 10: ACH Transaction Functions
the time interval for settlement of the transactions processed through the acH depends on the capabilities of the rtGs – where the
actual funds associated with the transaction instructions are settled between the banks. if the rtGs is not capable of intra-day settle-
ment, then acH settlement cannot be intra-day. the frequency for acH transaction settlement depends on the period supported by
the settlement institution’s rtGs.
payments between the central Bank and the member Banks are via settlement or reserve accounts at the central Bank, and, typically,
count as part of their overall liquidity ratios.
in some schemes, the acH is allocated a settlement account at the central Bank and sends instructions to pay against that account.
therefore, in this case, the payer’s Bank pays (the net settlement amount) into the acH settlement account from its account at the cen-
tral Bank and the acH pays into the payee’s Bank account at the central bank.
in some markets (notably the uk), there are multiple acH systems. legacy acH systems, operated using a batched next day transac-
tion settlement approach, continue to be used for direct debit instructions for utility and regular bill payments, which have a very much
higher volume than is required for direct credits. Here, direct credits operate on a separate system to an intra-day settlement cycle. Both
transactional systems use the central bank as the settlement institution. (note: the environment in the us is more complicated as they
have multiple Federal reserve Banks under the Federal reserve.)
the separation of rtGs and acH means that each system can be operated by different organisations. as the acH is a transaction netting
operation it is a technical operation and is often run on an outsourced arrangement from the payment system ‘owner’ (ie the members).
48
