Learning Objectives:

  • Understand large-value payment systems and their role in financial stability.

  • Explain RTGS and wholesale payment processing.

6.1 The Role of Large-Value Payment Systems

Large-value payment systems are used for high-value, time-critical transactions, primarily between financial institutions. The IBS curriculum includes “Large-value payment systems” as a core topic . The TU Berlin course covers “payment systems (RTGS systems, netting systems, retail payment systems)” .

6.2 Real-Time Gross Settlement (RTGS)

RTGS is the dominant model for large-value payments. In an RTGS system, transactions are settled individually and continuously in real time, provided the sending participant has sufficient balance or credit. This reduces settlement risk compared to net settlement systems.

6.3 Systemically Important Payment Systems

Large-value payment systems are classified as Systemically Important Payment Systems (SIPS) due to the high value of transactions they process and their potential to transmit financial shocks. The University of Newcastle course requires students to “recognise the various risks and evolutions in payments and the importance of payment infrastructure” . The IBS curriculum covers the “regulatory frameworks and standards governing the digital payments industry, both nationally and internationally” .

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