Fast payment system design
Fast payment systems are designed with participation rules, settlement arrangements, ISO 20022 messaging and fraud controls, following CPMI guidance.
GCRI · Digital Public Infrastructure
Payments technology
Payments technology covers the systems that move money between people, businesses and governments. In this field it addresses fast payment systems, messaging standards, fraud prevention, settlement and the use of payments infrastructure for public transfers.
01Register
Payments technology on the record.
Method recordSTEM method
- MethodPayment and financial market technology
- Applied inDigital Public Infrastructure
- Data3 inputs
- Checks3 validation steps
- Canonical pageSTEM Commons
02Application
What payment and financial market technology does here.
Payment and financial market technology covers the systems that clear and settle transactions and support trading. Their continuity is essential for economic activity and crisis response. In digital public infrastructure and cyber and digital resilience, payments analysis shows how operational outages or cyber events can freeze liquidity across the economy. It informs resilience standards and contingency arrangements. The canonical description is on the STEM Commons.
Fraud prevention for instant payments
Confirmation of payee, transaction monitoring and reimbursement rules are assessed for reducing scams on irrevocable payments.
Government-to-person payment rails
Benefit payment flows are mapped from agency to recipient to identify delays, costs and exclusion points.
03Simulator
Contagion on an interbank network.
A loss on external assets distresses banks in proportion to their leverage; DebtRank passes the distress along interbank exposures, round by round, until it settles. Teaching model with stated illustrative values, not a prediction.
Controls
- Fall in external assets
- 2.0%
- Leverage (assets over equity)
- 10 times
- Interbank share of assets
- 10%
- Recovery on interbank claims
- 40%
- Banks in the system
- 20
- Core banks
- 20% of banks
Readouts
- Equity lost to the initial shock
- 18.0%
- Equity lost after contagion
- 45.0%
- Added by contagion (DebtRank)
- 27.0 points
- Banks in default
- 0
Numbers, methods and sources
| Round | System equity lost (%) | Banks in default |
|---|---|---|
| 0 | 18.00 | 0 |
| 1 | 28.80 | 0 |
| 2 | 35.28 | 0 |
| 3 | 39.17 | 0 |
| 4 | 41.50 | 0 |
| 5 | 42.90 | 0 |
| 6 | 43.74 | 0 |
| 7 | 44.24 | 0 |
| 8 | 44.55 | 0 |
| 9 | 44.73 | 0 |
| 10 | 44.84 | 0 |
| 11 | 44.90 | 0 |
| 12 | 44.94 | 0 |
| 13 | 44.96 | 0 |
| 14 | 44.98 | 0 |
| 15 | 44.99 | 0 |
| 16 | 44.99 | 0 |
| 17 | 45.00 | 0 |
| 18 | 45.00 | 0 |
| 19 | 45.00 | 0 |
| 20 | 45.00 | 0 |
| 21 | 45.00 | 0 |
| 22 | 45.00 | 0 |
| 23 | 45.00 | 0 |
| 24 | 45.00 | 0 |
| 25 | 45.00 | 0 |
| 26 | 45.00 | 0 |
| 27 | 45.00 | 0 |
| 28 | 45.00 | 0 |
| 29 | 45.00 | 0 |
| 30 | 45.00 | 0 |
Methods
- DebtRank Battiston and others (2012), Scientific Reports 2:541
- Differential DebtRank Bardoscia and others (2015), PLOS ONE 10
- Contagion in financial networks Gai and Kapadia (2010), Proc. R. Soc. A 466
- Clearing in financial networks Eisenberg and Noe (2001), Management Science 47
- Uncertainty fan (parameter Monte Carlo) Spiegelhalter, Pearson and Short (2011), Visualising uncertainty about the future, Science 333
- One-at-a-time sensitivity (tornado) Saltelli and others (2008), Global Sensitivity Analysis: The Primer, Wiley
Data
No observed data enters this model: it runs on the teaching values set by the controls, to be replaced with a programme's own evidence.
Across the six pillars, led by Nexus Consortium
- Experiments Labs
- Built in Digital Public Infrastructure in Foundry
- Tested at Digital Public Infrastructure in Universe
- Codified in Open Infrastructure and Developers in Standards
- Published in Digital Public Infrastructure in Reports
- Taught in Faculty of Technology and Digital Systems in Academy
04Data
What the method consumes.
Datasets and records used by payment and financial market technology on this platform, with the role each plays and the label its values carry. Sources are listed in the source register.
| Data | Role | Label |
|---|---|---|
| Payment system statistics | Volumes | Published statistics |
| Fraud reports | Losses | REPORTED |
| Programme payment records | Transfers | Published statistics |
05Methods and evidence
How payments technology is modelled, measured and tested.
The model, its assumptions, its data and its uncertainty, in the form a scientist or engineer would check. Structures follow published methods. The values drawn are illustrative, not findings.
Datasets and provenance
The data classes behind payments technology and what is recorded about each before it is used.
| Data class | Provenance recorded | Resolution stated | Licence checked |
|---|---|---|---|
| Satellite imagery, optical and radar | sensor, processing level, acquisition date | pixel size and revisit | per scene |
| Reanalysis and climate model output | model, experiment, member, version | grid and time step | per release |
| In-situ sensors and gauges | station, instrument, calibration record | point and sampling rate | per network |
| Population and asset exposure | method, vintage, input sources | cell size and unit | per release |
| Boundaries and reference geography | producer, edition, date | scale | per edition |
- Lineage
- W3C PROV record from source to figure
- Principles
- FAIR: findable, accessible, interoperable, reusable
- Gaps
- shown as missing, never filled silently
FAIR guiding principles · GO FAIR and FORCE11W3C PROV · World Wide Web ConsortiumGuidance on consistent treatment of uncertainties · IPCCCEOS Analysis Ready Data · Committee on Earth Observation Satellites
06Validation
How results are checked.
Systems are tested through failover exercises, liquidity simulations and supervisory oversight. Reconciliation checks the integrity of settled positions.
| Check | How it is done |
|---|---|
| Standards conformance | Messages are checked against ISO 20022 specifications |
| Fraud control evaluation | Effects of controls are measured over time |
| Settlement risk review | Settlement arrangements are reviewed against the PFMI |
Interdependence among participants and third-party providers can produce unexpected failures. Simulations may not capture behavioural responses under stress.
07Connections
Topics that rely on this method.
08Stewardship
Who maintains the method.
Payments and Market Infrastructure stewards payment and financial market technology for the Consortium and reviews how it is applied across platforms.
09Connected
Where this page leads across the Consortium.
10Questions
Questions and answers.
What are the limits of payment and financial market technology in this field?
Interdependence among participants and third-party providers can produce unexpected failures. Simulations may not capture behavioural responses under stress.
How are results checked?
Systems are tested through failover exercises, liquidity simulations and supervisory oversight. Reconciliation checks the integrity of settled positions.
Are the values on this page real?
The data names, roles and checks are real descriptions of practice. The canvas shows a design of the method's use, not a run; no result is reported here.
Where else is this method applied?
The canonical method page lists every platform that applies it.
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