Banking, payments, and e-money
What is payment initiation service, and how it can be used?
Last Updated: April 7, 2026A Payment Initiation Service (PIS) is a regulated service through which an authorised third-party provider – a Payment Initiation Service Provider (PISP) – instructs a payment directly from a user’s bank account to a recipient, with the user’s explicit consent. Rather than routing a transaction through a card network or requiring the user to log...
What is a banking superapp and what does it offer?
Last Updated: April 7, 2026A banking superapp is a mobile application that integrates a broad range of financial and non-financial services into a single platform, allowing users to manage banking, payments, and everyday lifestyle needs without switching between separate applications. Unlike a standard mobile banking app – which focuses on account management and transactions – a banking superapp functions...
What is Banking as a Service, or BaaS?
Last Updated: April 7, 2026Banking as a Service (BaaS) is a model in which a licensed bank or e-money institution enables its core banking infrastructure, regulatory permissions, and payment processing capabilities to third-party businesses through APIs (Application Programming Interfaces). This allows non-banking entities to embed regulated financial services – such as current accounts/e-wallets opening, card issuance, and payments –...
What is an Account Servicing Payment Service Provider?
Last Updated: April 7, 2026An Account Servicing Payment Service Provider (ASPSP) is a regulated entity that holds and manages payment accounts on behalf of individuals, businesses, or other organisations. Under the Payment Services Directive 2 (PSD2), ASPSPs are required to open their account infrastructure to authorised Third-Party Providers (TPPs) through secure, standardised open banking APIs, enabling both account information...
Who are Third-Party Providers (TPPs), and what is their role?
Last Updated: April 7, 2026Third Party Providers (TPPs) are regulated entities that, under the Payment Services Directive 2 (PSD2) framework, are authorised to access a user’s bank account data or initiate payments on their behalf, always with the user’s explicit consent. TPPs access this data and functionality through standardised open banking APIs provided by banks and payment institutions, which...
What is Account Information Service, and how it can be used?
Last Updated: April 7, 2026An Account Information Service (AIS) is a regulated open banking service that enables a licensed third-party provider – known as an Account Information Service Provider (AISP) – to access and consolidate financial account data from one or more banks or payment institutions, with the explicit consent of the account holder. AISPs operate under the Payment...
What is Original Credit Transaction (Visa and Mastercard) and how is it used in payments?
Last Updated: April 7, 2026An Original Credit Transaction (OCT) is a unique form of payment transaction that underpins the functionalities of major payment networks, such as Visa and Mastercard. Serving as a conduit for directly crediting funds to a recipient’s Visa or Mastercard account, OCTs have dramatically reshaped the terrain of financial transactions. Key Takeaways: Visa Direct and Mastercard...
What is SEPA, and what types of payment transactions it facilitates?
Last Updated: April 7, 2026The Single Euro Payments Area (SEPA) has carved a pivotal niche in the realm of European electronic payments. By standardizing euro payments across a myriad of European countries, SEPA has led the charge towards a more coherent and efficient financial system. Covering an impressive span of 36 countries, including members of the European Union (EU)...
What is Step2 and what types of payment transactions it supports?
Last Updated: April 9, 2026STEP2 is a pan-European Automated Clearing House (ACH) operated by EBA CLEARING, providing centralised clearing infrastructure for retail euro payments across the Single Euro Payments Area (SEPA). Launched in 2003, it is one of the two major pan-European ACH platforms alongside STET, and connects hundreds of financial institutions across 36 SEPA countries. STEP2 processes payments...
What is Target2, and what types of payment transactions it supports?
Last Updated: April 9, 2026TARGET2 was the Eurosystem’s Real-time Gross Settlement (RTGS) system for large-value euro-denominated payments, operated collectively by the European Central Bank (ECB) and the national central banks of the Eurozone. Launched in 2007, it served as the primary settlement infrastructure for interbank transfers, monetary policy operations, and cross-border euro payments across the European Union. In March...
What is Faster Payments (UK), and what types of payment transactions it supports?
Last Updated: April 9, 2026Faster Payments is a UK payment scheme launched in 2008 that enables near-instant electronic fund transfers between participating banks and financial institutions. Operated by Pay.UK, with settlements handled by the Bank of England, it processes the majority of online and mobile banking transfers in the United Kingdom and is available around the clock, including weekends...
What is Bacs, and what kind of payments it supports?
Last Updated: April 9, 2026Bacs is the UK’s established electronic payment scheme, responsible for the bulk of bank-to-bank fund transfers processed domestically. Operated by Pay.UK, Bacs has been processing payments since 1968 and remains the backbone of recurring and bulk payment processing in the United Kingdom, handling payroll, pensions, benefits, and consumer bill payments at scale. As illustrated in...
What is NACHA (USA), and what types of payments it supports?
Last Updated: April 9, 2026NACHA is a non-profit organisation that oversees the ACH (Automated Clearing House) Network, the electronic payment infrastructure underpinning the majority of bank-to-bank fund transfers in the United States. Established in 1974, NACHA defines the operating rules, standards, and risk management frameworks that financial institutions must follow when processing ACH transactions. In 2023, the ACH Network...
What is SWIFT, and what types of payments it supports?
Last Updated: April 9, 2026SWIFT is a secure, standardised messaging network that enables financial institutions worldwide to communicate payment instructions and financial data. Founded in 1973 and headquartered in Belgium, it connects over 11,000 financial institutions across more than 200 countries and territories, making it the backbone of international financial communication. As illustrated in a typical SWIFT payment flow,...
What is a correspondent bank, and what is its role in payments?
Last Updated: April 9, 2026A correspondent bank is a financial institution that provides services on behalf of another bank, typically in a different country. It acts as an intermediary, enabling cross-border transactions between banks that have no direct relationship with each other, forming the backbone of international payment infrastructure. As illustrated in a typical correspondent banking flow, a sending...
What is a ledger-centric architecture in core banking systems?
Last Updated: April 29, 2026A ledger-centric architecture is a core banking system design philosophy in which the general ledger occupies the central position in the system’s data architecture, rather than being a downstream reporting layer that financial data is pushed into periodically. In a ledger-centric system, every financial event, whether a payment transaction, a fee posting, a currency conversion,...
What is the difference between a core ledger and a payments ledger?
Last Updated: April 29, 2026The terms core ledger and payments ledger describe two distinct but related ledger functions within a financial institution’s core banking system. Understanding the difference between them is important for payment institutions and e-money institutions evaluating core banking systems, as the presence and integration of both ledger types determines the institution’s ability to track individual payment...
How does event-driven architecture work in payment platforms?
Last Updated: April 29, 2026Event-driven architecture (EDA) is a software design pattern in which system components communicate by producing and consuming structured records of significant occurrences, called events, rather than by making direct calls to one another. In a payment platform built on event-driven architecture, every meaningful state change, whether a customer initiates a payment, a payment reaches settlement,...
What is the role of message queues in payment systems?
Last Updated: April 29, 2026Message queues are infrastructure components that enable one software service to send a message to another service without requiring the sender and receiver to be available and communicating simultaneously. The sender publishes a message to the queue, where it is stored durably until the receiving service retrieves and processes it. This decoupling of sender and...
How do core banking systems achieve high availability and fault tolerance?
Last Updated: April 29, 2026Core banking high availability and fault tolerance are two related but distinct properties of a core banking system. High availability refers to the system’s ability to remain operational and accessible to users for a defined proportion of time, typically expressed as a percentage uptime target such as 99.9 percent or 99.99 percent. Fault tolerance refers...
How does multi-tenant architecture vs single tenant in SaaS core banking platforms compare?
Last Updated: April 29, 2026Multi-tenant architecture is a software design approach in which a single deployed instance of a SaaS application serves multiple distinct clients, referred to as tenants, on shared infrastructure. Each tenant’s data, configuration, and processing are logically isolated from all other tenants, but the underlying compute, storage, and networking infrastructure is shared across the tenant population....