1. anb1 Payment and Clearing Systems

2. anb2 Payment and Clearing Systems What is important? Float Value dating Availability Finality Cost Security

3. anb3 Payment and Clearing Systems Value Dating Value is the time when a payor ceases to be able to use the funds in the sense of accruing interest or making a payment and is the time when a beneficiary is able to use the funds in the sense that they may be used to pay down an overdraft, accrue interest or be used to make a payment.

4. anb4 Payment and Clearing Systems Value Dating Forward Value Dating The time between a bank being notified of a transaction in favor of a customer and the customer receiving future value for the item Back Value Dating The time between a bank being notified of a transaction to the customers account and the item being valued on a date prior to the date of the transaction

5. Payment and Clearing Systems Availability Availability The time when the beneficiary actually has access to the funds i.e. to use to make a payment anb5

6. 6 Payment and Clearing Systems Finality The time after which a payment is considered to become irrevocable and cannot be returned without the permission of the beneficiary account holder.

7. anb7 Payment and Clearing Systems Cost Different payment systems have different features as to Value, Float, Finality and security. Because of this they also have different costs The Cash Manager therefore has to be careful to use the most cost effective method to get the job done

8. anb8 Payment and Clearing Systems Security We need security to avoid Theft Fraud Loss Error Contamination These issues will be considered later but first consider types of Clearing systems