Payment systems in

France

France

CPSS - Red Book - 2003 109

Table of contents

List of abbreviations............................................................................................................................. 111 Introduction .......................................................................................................................................... 113 1. Institutional aspects ................................................................................................................... 113

1.1 The general institutional framework ................................................................................ 113 1.1.1 General legal aspects ........................................................................................... 113

1.2 Role of the Bank of France ............................................................................................. 115 1.2.1 Payment and securities systems .......................................................................... 115 1.2.2 Payment media ..................................................................................................... 116 1.2.3 Prevention of fraud................................................................................................ 116

1.3 Role of other private and public sector bodies................................................................ 117 1.3.1 Financial intermediaries allowed to provide payment services............................. 117 1.3.2 Representative bodies .......................................................................................... 117 1.3.3 Regulatory and supervisory authorities ................................................................ 118 1.3.4 Other entities......................................................................................................... 118

2. Payment media used by non-banks .......................................................................................... 118 2.1 Cash payments ............................................................................................................... 118 2.2 Non-cash payments ........................................................................................................ 119

2.2.1 Credit transfers ..................................................................................................... 119 2.2.2 Cheques................................................................................................................ 119 2.2.3 Direct debits .......................................................................................................... 119 2.2.4 Card payments...................................................................................................... 120 2.2.5 Postal instruments ................................................................................................ 120 2.2.6 Other payment instruments................................................................................... 120

2.3 Recent developments ..................................................................................................... 121 2.3.1 Electronic money .................................................................................................. 121

3. Interbank exchange and settlement systems............................................................................ 122 3.1 General overview ............................................................................................................ 122 3.2 The French real-time gross settlement system, Transferts Banque de France.............. 122

3.2.1 Operating rules ..................................................................................................... 122 3.2.2 Participation in the system.................................................................................... 123 3.2.3 Types of transactions handled.............................................................................. 123 3.2.4 Operation of the system........................................................................................ 124 3.2.5 Transaction processing environment.................................................................... 124 3.2.6 Settlement procedures.......................................................................................... 124 3.2.7 Credit and liquidity risk.......................................................................................... 125 3.2.8 Pricing ................................................................................................................... 125 3.2.9 Statistics................................................................................................................ 126

France

110 CPSS - Red Book - 2003

3.3 The other French large-value payment system, Paris Net Settlement ........................... 126 3.3.1 Operating rules...................................................................................................... 126 3.3.2 Participation in the system .................................................................................... 126 3.3.3 Types of transactions handled .............................................................................. 126 3.3.4 Transaction processing environment .................................................................... 126 3.3.5 Settlement procedures .......................................................................................... 127 3.3.6 Risk management features ................................................................................... 127 3.3.7 Pricing ................................................................................................................... 127 3.3.8 Statistics ................................................................................................................ 128

4. Retail payment systems............................................................................................................. 128 4.1 The French automated clearing house, SIT .................................................................... 128

4.1.1 Operating rules...................................................................................................... 128 4.1.2 Participation........................................................................................................... 128 4.1.3 Types of transactions handled .............................................................................. 129 4.1.4 Operation of the system ........................................................................................ 129 4.1.5 Technical environment .......................................................................................... 129 4.1.6 Settlement procedures .......................................................................................... 129 4.1.7 Pricing ................................................................................................................... 129 4.1.8 Credit and liquidity risk management .................................................................... 129

4.2 Exchange of truncated cheques...................................................................................... 129 4.2.1 Objectives.............................................................................................................. 129 4.2.2 Operating rules...................................................................................................... 129

5. Securities settlement systems ................................................................................................... 130 5.1 Trading............................................................................................................................. 130

5.1.1 Institutional aspects............................................................................................... 130 5.1.2 Operational aspects .............................................................................................. 131

5.2 Clearing ........................................................................................................................... 135 5.2.1 Institutional aspects............................................................................................... 135 5.2.2 Operational aspects .............................................................................................. 136

5.3 Settlement........................................................................................................................ 137 5.3.1 Institutional aspects............................................................................................... 137 5.3.2 Recent evolution of SSS organisation .................................................................. 138 5.3.3 RGV2: the non-RTGS stream ............................................................................... 140 5.3.4 RGV2: the RTGS stream ...................................................................................... 141 5.3.5 Evolution under way.............................................................................................. 142

5.4 The use of the securities infrastructure by the Bank of France....................................... 143 5.4.1 The Bank of France as liquidity provider in the SSS............................................. 143 5.4.2 Money market operations...................................................................................... 143

France

CPSS - Red Book - 2003 111

List of abbreviations

AEX Amsterdam Exchanges

AFECEI French Association of Credit Institutions and Investment Firms - Association Franaise des tablissements de Crdit et des Entreprises dInvestissement

AFE