Introduction for payment systems

Payment system is established infrastructure for transfer of funds between participants, which is composed of institutions, instruments, rules, procedures and technical means for secure transmission.

Hence, the payment system includes:

  • payment instruments that initiate the transfer of funds by the principal,
  • processing (clearing) of payment instructions of the participants in the payment system,
  • settlement of payments between participants in the payment system - commonly using funds on accounts with the central bank, and
  • agreed common operating procedures, rules and technical standards (participants, accounts, charging, etc.).

Nowadays, payments are usually committed through the use of bank deposits. To make payment, the principal must issue instructions, usually to the bank where they keep money that should be transferred. The instruction can be in a paper form or an electronic instruction using modern technological solutions (credit card, PC or mobile device). Furthermore, the payment instruction is processed and is usually settled without the participation of the principal of instruction. Hence, although the payment system is essential for providing payment services to the end users, however, they are not direct participants in the payment system and its payment is executed indirectly through a limited number of direct participants in the payment system.

  1. Payment order is issued to the Payer's Bank.
  2. Payer's Bank delivers the payment order to payment system (a) Retail payment system or (b) RTGS.
  3. Processing the payment instructions and delivering the net positions to the RTGS.
  4. Settlement and issuing confirmations for (a) crediting and (b) debiting to the beneficiary and payers banks.
  5. (a) Crediting and (b) Debiting of the beneficiary and payers accounts.

The following payment systems operate in the Republic of North Macedonia: