Payment instruments

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來自 Copenhagen Business School 的課程

FinTech and the Transformation in Financial Services

256 個評分

Copenhagen Business School

FinTech and the Transformation in Financial Services

256 個評分

課程 2（共 4 門，Specialization Digital Transformation in Financial Services）

The FinTech revolution is rapidly transforming the financial industry. The use of digital technologies is the norm, and together with regulatory and market changes it is creating a revolution. After completion of the module, you'll be able to: describe the changes that influence the financial sector, understand the complexity of the payment infrastructure, identify and explain the key payment instruments and how they function, understand the types of money that exits, and recognize changes in the regulatory frameworks and how they inhibit or promote innovation. To begin, I recommend taking a few minutes to explore the course site. A good place to start is the navigation bar on the left. Click Course Content to see what material we’ll cover each week, as well preview the assignments you’ll need to complete to pass the course. Click Discussions to see forums where you can discuss the course material with fellow students taking the class. Be sure to introduce yourself to everyone in the Meet and Greet forum! This course should take about four weeks to complete. You can check out the recommended course schedule below to see a quick overview of the lessons and assignments you’ll complete each week. By the time you finish this course, you’ll have mastered mastered the transformational forces of digitalization and the new competitive dynamics it gives rise to, learned from leading financial companies and seen inspirational examples from the digital masters. Good luck as you get started. I look forward to seeing you in class!

從本節課中

Money and payments

At the heart of the Fintech revolution you will find money and payments. It makes the world go around. In this module, we will learn about money and its history, difference between central bank money and bank money, different payment instruments, and finally how payment instruments are used in contemporary payment methods.

Payment instruments5:45

與講師見面

Jonas Hedman
Associate Professor
Department of Digitalization
Stefan Henningsson
Associate Professor
Department of Digitalization

Take a minute and think of how you paid the last time.

So what payment instrument did you use?

Was it cash, card,

or bank transfer? Does it matter?

Yes. From a payment system perspective,

it has a large implication.

We will return to this.

In this lesson, we're going to learn about

the different payment instruments that exist including cash and card.

The most common distinction between payment instrument is cash and non-cash payments.

Cash payments are usually face-to-face flow value

between individuals or between individuals and merchants.

Cash payments are anonymous, immediate, and final.

And in most countries, cash is a legal tender.

So non-cash payments involve the transfer of money between accounts.

Every payment instrument includes a set of

procedures enabling the transfer of money from the payer to the payee.

For instance, a wire transfer needs to include sender and receiver information.

But there are many different payment instrument,

each with its own characteristics depending on

the type of a relationship and transaction between the payer and payee.

The first thing you need to learn is that we have two broad types of

non-cash payment instruments depending on who is

submitting the payment or into the banking system.

The first is credit-based,

also called direct credit or wire transfers.

These payments are initiated by the payer.

While the second type is debit-based,

also referred to as direct debit and initiated by the payee.

Let's look a little bit deeper into direct credits and direct debits.

Direct credits or wire transfer are instructions sent by the payer to its bank

requesting that a defined amount of money to be transferred to the account of the payee.

For example, when you send money to

a friend or paying an invoice through your online bank.

Direct debits, on the other hand,

are submitted by the payee on the basis of authorization given by the payer.

One illustration of this is when I pay my utility bills in Denmark.

I have an agreement with my utility provider which allows them to

fetch money from my account on a monthly basis. Sounds strange?

But remember that national rules vary a lot,

but we will not go into those details.

There are some other important direct debit payment instruments.

The most important one is the payment card.

Payment cards are accessed devices that you can use to pay for goods or services,

either at the point of sale or remotely.

For example, online shopping or to withdraw money at ATMs.

Payment cards are used to authorize a debit from

the cardholder's account or to draw on a line of credit granted by the card issuer.

The most common payment cards are debit and credit cards.

Debit cards are link to a bank account and allow the cardholder to

charge purchases or ATM withdrawals directly and individually to his account.

Credit cards provide the cardholder with

a credit and the possibility of delaying payments.

There are also other cards such as single and multipurpose prepaid cards,

gas cards, and store cards.

These cards are issued by

non-banking institution or by banking institution on behalf of merchants.

Every card, regardless of type,

is issued based upon a schema,

and all transactions are cleared and settled via that schema.

In addition, there are special purpose payment instruments.

One such is money order,

which is a payment product based on the credit transfer instrument,

and it's used to transfer money remotely.

It is often used when the payer and/or

the payee does not have an account with the same financial institution.

It can be used for domestic and foreign currency payments.

It is commonly used by immigrants to send money home.

And finally, we have something that we call electronic money or e-money.

There is a claim on the issue which is stored

on an electronic device and accepted as a mean of payment.

An example of e-money is if you have a prepaid bus card.

E-money can either be hardware-based,

typically on a card, or software-based on your mobile phone.

So there are some important learnings from this lesson and they are,

there are many payment instruments.

There are two important types of non-cash payment instruments,

credit based submitted by the payer.

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