05 - Payment System

  1. Payments System
    Facilitates the transfer of value from one party to another for financial transactions.
  2. High-value Payments
    Large-value transactions that are cleared by real-time gross settlement.
  3. Electronic Funds Transfer at Point of Sale (EFTPOS)
    Electronic system that facilitates blue transactions for goods and services.
  4. Pay Anyone
    Internet banking service that enables funds to be transferred to any financial institution in Australia.
  5. Exchange Settlement Account
    Same-day funds held with the Reserve Bank.

    Facilitates settlement of payments system value transactions.
  6. Same-day Funds
    Funds that do not require clearing through the payments system.

    Required for exchange settlement account.
  7. Real-time Gross Settlement (RTGS)
    High-value payments system.

    Transactions are settled immediately through exchange settlement accounts.
  8. Settlement Risk
    Possibility that one party to a financial transaction will not deliver value.
  9. Systemic Risk
    Risk that the failure of an institution will adversely affect the market as a whole.
  10. Business Cycle
    Change in economic activity over time through cycles of expansion and contraction.

    • Peak = Highest level of activity.
    • Trough = lowest level of activity.
  11. Gross Domestic Product (GDP)
    Aggregate value of goods and services produced within a domestic economy.
  12. Balance of Payments
    Record of a country's transactions with the rest of the world.
  13. Liquidity Effect on Interest Rates
    Effect on the money supply and system liquidity of a central bank's open market operations.
  14. Income Effect on Interest Rates
    Interest rates rise = economic activity slows, incomes will fall, thus allowing rates to begin to ease.
  15. Inflation Effect on Interest Rates
    Economy slows = upward pressure on prices will ease, thus allowing rates to fall.
  16. Economic Indicators
    Economic sector data that provide some insight into possible future economic growth.
  17. Indicators
    Leading = economic variables that change before there is a change in the business cycle.

    Coincident = Economic variables that change at the same time as the business cycle changes.

    Lagging = Economic variables that change after the business cycle has changed.
  18. Loanable Funds
    The amount of funds available for lending within the financial system.
  19. Public Sector Borrowing Requirement
    Total borrowing requirements from various levels of government and their instrumentalities.
  20. Money Supply
    Total amount of money in an economy .

    Includes currency and deposits with financial institutions.
  21. Dishoarding
    Normal cash holdings are reducedĀ and invested in financial instruments.
Card Set
05 - Payment System
230 - Payment System