The History and Operation of International Payment System

Abstract

In many ways, international payments are similar to domestic payments. They involve a payer using the services of one or more intermediaries to transfer value to a payee. However, they tend to involve a number of additional complexities as a result of the distance between the parties, the different time zones and currencies, and the need for additional intermediaries. This has led to the development of unique payment facilities specially catering for the needs of users of international payments. This article will consider the history of international payments, and their current role and scope. It will describe a number of common retail, wholesale and institutional payment systems and examine their legal structure. It will go on to examine the inter-bank infrastructure supporting the international payment system. The next article will examine the legal structure of international payments in detail. It will analyse international payments from a legal perspective, looking at a number of key issues in depth such as payment mandate, finality and revocability.