Tips and Tricks to Find the Best site of payment gateway for school

In addition, the concept of settlement includes "securities settlement," which means the transfer of securities after a trade of equities, government bonds, or corporate bonds. However, the securities settlement is nearly out of the scope of this book. This book concentrates on the schemes of fund settlement. Payment system plays an essential role in this arena and is sometimes referred to as "interbank funds transfer system."

In the early days, the payments among the banks used to be made by exchanging the paper payment gateway for school instructions. But, as the number of payments increased substantially, it became quite difficult to transfer funds smoothly with the paper instructions and manual handling. Therefore, people tried to utilize Information Technology (IT) in the payment system. This endeavor resulted in developing the "electronic payment systems" which were equipped with the computer systems and networks.

As is often the case, the operators of payment systems admit indirect participants as well as direct participants as a participation method. "Direct participant" has an account with the settlement agent and can directly exchange payment orders with other participants in the system. On the other hand, "Indirect participant" usually does not have an account, cannot send payment order directly to the payment system, and has to make settlements through direct participants. Indirect participant (the second-tier participant) makes arrangement with direct participant (the first-tier participant) who make settlements on behalf of the indirect participant.

This kind of approach is called a "tiered structure" or "tiered membership" in a payment system. Some payment systems adopt the tiered structure with indirect participants and others allow only the direct participants. For example, the CHAPS in the UK is famous for a highly tiered structure, with only 18 direct participants out of around 350 commercial banks in the UK. On the contrary, the BOJ-NET admits only the direct participants.

In the tiered structure, the direct participant who widely accepts the responsibility of settlement for indirect participants is referred to as "Clearing Bank." A Clearing Bank can internalize many settlements in its own books. This process is called the "internalization" of payment gateway for college. This is a situation where payments are settled between the accounts of the same Clearing Bank internally, without being processed through the payment system.

If the internalization advances, one Clearing Bank can settle a substantial amount of payments in-house. In this case, the bank starts to have a public nature like payment system, and is sometimes referred to as a "Quasi Payment System." A Clearing Bank or Quasi Payment System is required to secure higher level of risk management than the ordinary participants of payment systems.

There are two kinds of payment orders. One is the "credit transfer order," which requests the funds to be moved from the payer's (originator's) account to the payee's (beneficiary's) account. The other is the "debit transfer order," which is the debit collection orders made or authorized by the payer to move funds from (the bank of) the payee to (the bank of) the payer and result in a charge (debit) to the account of the payer. Most large-value payment systems are only for the credit transfer orders, and most of retail payment systems support both the credit transfer and debit transfer orders.

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