This lesson examines the principal payment systems and the cash management services provided by banks.

7.1 Payment Systems and Clearing Mechanisms

Treasury must understand the payment systems used to settle transactions. The ACT syllabus requires the learner to “Identify the principal payment systems available and the basis on which they would be selected” . Key topics include:

  • Availability, finality, value dating and float: Understanding the timing and finality of payments .

  • Clearing and settlement systems: Including net settlement and real-time gross settlement (RTGS) systems .

  • Payment instruments: Including physical and electronic instruments .

  • Making international payments: The use of correspondent banks, network banks, or banking alliances .

  • SWIFT: The secure messaging network for financial institutions .

  • International Bank Account Numbers (IBANs): Standardised account numbers for cross-border payments .

7.2 Cash Management Services Provided by Banks

The ACT syllabus also requires the learner to “Evaluate the most appropriate cash management services provided by banks to meet the needs of the organisation” . This includes:

  • Duties and functions of a bank: Understanding the role of a bank in providing payment and cash management services .

  • Types of bank accounts: Including current, deposit, and currency accounts .

  • Documentation requirements: The paperwork required to open and operate bank accounts .

  • Selecting a bank: The process of evaluating and choosing a bank, including the associated documentation requirements .
    The AFP’s CTP body of knowledge also includes Payment Systems as a key domain, covering “Utilize various types of payment systems and Internet technologies to transfer monetary value and business documents between parties” .

7.3 Bank Relationship Management

Selecting and managing bank relationships is a key cash management activity. The ACT syllabus highlights this through the learning outcome “Selecting a bank and the associated documentation requirements” . The CTP body of knowledge more broadly covers “Building cost effective relationships with financial services providers” . Effective bank relationship management ensures access to credit, competitive pricing, and reliable service delivery.

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