Re-Engineering Payment Systems for the E-World

Bank of Finland Working Paper No. 17/2000

44 Pages Posted: 23 Jun 2002

See all articles by Harry Leinonen

Harry Leinonen

Bank of Finland - Financial Markets

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Date Written: November 29, 2000


Payment systems are undergoing rapid changes stimulated largely by technological progress. Distributed network technology, real-time processing and customers' willingness to use electronic banking interfaces will further reshape payment systems during the coming years. Internet and e-commerce will have a major impact on payment systems.

This paper presents the current developmental trends. It analyses the need to develop payment standards and the content of payment instructions in order to fully automate the payment process. Since interbank settlements comprise an essential part of payments, they should be made an integral part of the payment process within the Internet environment. With cross-border payments increasing in importance, any new developments should take an international perspective.

Payment system development requires cooperation between the banks and other participants involved. In order to build the necessary consensus, banking industry organizations as well as central banks and other regulators will need to work together to re-engineer the present payment systems, making full use of the possibilities created by modern technology.

Keywords: payment systems, settlement systems, RTGS, payment system integration

Suggested Citation

Leinonen, Harry, Re-Engineering Payment Systems for the E-World (November 29, 2000). Bank of Finland Working Paper No. 17/2000, Available at SSRN: or

Harry Leinonen (Contact Author)

Bank of Finland - Financial Markets ( email )

P.O Box 160
FIN-00101 Helsinki

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