What is a payment system?

Published: 5/6/2020

Payment operations are an integral part of the economic system of a country and their basic function is to enable a safe and effective use of cash as a means of payment and to execute cashless payment transactions, i.e., to transfer funds from the payer to the payee. A successful and safe functioning of payment operations is also of exceptional importance for the central bank, the institution responsible for the functioning of the national payment system, as well as for the overall financial system and all of its participants. Payment operations comprise a set of instruments, procedures, rules and technical support for sending information and settling transactions between participants. In a narrower sense, payment operations include formal arrangements based on contracts and legislation, with standardised rules and contractual relations for sending, clearing and settling of liabilities and instruments between participants.

Payment services may be provided by credit institutions, electronic money institutions, small electronic money institutions, payment institutions, small payment institutions and registered account information providers.

Payment operations in the Republic of Croatia are carried out through four payment systems:

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