Some banks provide help in fee payment gateway

A system is a system or an organization which conducts the funds transfer. Some systems are managed by private companies and called a "private system," and others are managed by central banks and referred to as a "central bank fee payment gateway system." In many countries, those two systems co-exist and share the roles.

Usually, a system covers one jurisdiction (or country) and one currency. In several cases, however, a system covers more than one country or more than one currency. There is also a case with several systems interlinked with each other.

systems take on a public nature, as they handle a huge amount of s from many individuals, corporations and banks all over the country. Thus some conditions are required for a system. First, a system should be managed efficiently by a sound business method. Second, the operator of system should manage settlement risk strictly in order to minimize the effect when defaults happen.

Historically, central banks have played an active role in system. Central banks inherently have the function as "the bank for banks," where almost all banks hold accounts. Central banks can provide the settlement assets with finality, which is called the "central bank money." Therefore, as a part of their function, central banks operate a system and provide settlement service for financial institutions, typically banks.

Central banks are also the active participants in systems for conducting open market operations. It means that the central bank uses its system to implement monetary policy. Hence, it is widely recognized that a sound system is a precondition for the successful conduct of monetary policy.

The extent to which central bank is involved in the system varies from country to country. It is generally the case that central banks tend to support the interbank system, which handles large-value s. Some other central banks are also involved in the operation of retail systems. The typical case is the Federal Reserve in the US.

Some central banks also offer a settlement service for the private systems. More concretely, a private system calculates the positions to be settled among the participants, and then the actual transfers of funds take place in the central bank system.

Another important role of central banks is to provide the liquidity to the participants of a system. The system requires a certain amount of intraday liquidity for a smooth settlement. As a provider of central bank money, only a central bank can carry out this responsibility (discussed in more detail later).

Banks are major participants of online payment solution . They use systems to settle their own obligations in the money market, securities market and FX market. They also use systems on behalf of their customers, e.g. individuals and corporations.

As mentioned above, banks can execute "internal settlement," when the payer and the payee have their bank accounts at the same bank. This kind of transaction is referred to as an "on-us" transaction or "book transfer."

In this sense, a bank can be regarded as a kind of system itself. That is because they can make settlements with their books, even in a small scale. The more they make internal settlements, the more they take on the nature of system. When it comes to the transfer of funds between accounts held at different banks, the system comes into play and handles the settlement between the two banks.

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