Glossary

See IID

The Business Identifier Code (BIC) is a SWIFT 8- or 11-digit code (ISO 9362) used to identify unequivocally both participating financial and non-financial institutions.

BDD (Business Direct Debit) is the process offered by the Swiss banks for the processing of direct debits without right of objection. It is suitable for companies that predominantly collect large amounts in francs or euro in the business customer sector. The business model here is generally based on the delivery-verses-payment principle.

camt (Cash Management) denotes XML messages used between bank/PostFinance and customer, according to the definitions of the ISO 20022 standard. The «Cash Management Messages» are specified as follows: Bank-to-Customer Account Report (camt.052), Bank-to-Customer Statement (camt.053) und Bank-to-Customer Debit/Credit Notification (camt.054).

The ISO 20022 message camt.052 for intraday account statements (turnover, transactions) can be delivered at regular intervals (every hour or every two hours) or daily at a maximum of three set times. Each camt.052 message contains all the entries since the last ordinary account statement. Note: Not all of the financial institutions are offering these messages for intraday account statements (camt.052).

The XML message "Bank-to-Customer Statement" (camt.053) is used by financial institutions for providing electronic account information to their customers. It represents the ISO 20022 standard for account statements and is delivered by default via the Bank Transaction Codes (BTC) published by ISO.

Debit and credit notifications are covered in the ISO 20022 standard by camt.054 messages. Delivery of notifications is usually done via incoming and outgoing payments on an event-driven basis (e.g. following a payment order). Note: Not all of the financial institutions are offering these messages for debit and credit notifications (camt.054).

The process of transmitting, reconciling and, in some cases, confirming payment orders or security transfer instructions prior to settlement, possibly including the netting of instructions and the establishment of final positions for settlement. Sometimes the term is used to include settlement.

Continuous Linked Settlement: The global CLS payment system, operated by some of the world’s largest commercial banks, processes currency transactions in the major currencies according to the payment against payment principle. Processing on both sides of the currency transaction operates with simultaneous credit and debit of the settlement members' accounts at the CLS Bank in New York. To facilitate this, each of the parties holds an account at the CLS Bank that gives them access to various national payment systems. Processing takes place via a direct link between SIC and the CLS Bank. This eliminates processing risks known as "Herstatt risks" (time-shifted processing that leads to considerable fulfilment risk). Direct system participants can use CLS services not only for their own purposes, but also offer them to their customers (third-party business).

Security in form of stocks and bonds or moneys which are handed to the "Cash Provider" by the "Cash Taker".

A settlement that takes place in a country other than the country in which one trade counterparty or both are located.

Delivery versus payment: A link between a securities transfer system and a funds transfer system that ensures that delivery occurs if, and only if, payment occurs.

The Swiss banks used to offer their customers the electronic transmission of payments in a standardized DTA (German for "Datenträgeraustausch") format as a means of executing paperless payments. The DTA standard was withdrawn from the market on 30 June 2018.

As from 1 July 2018, the DTA standard is eliminated. The document "DTA – Standards and Formats" has been be discontinued and removed from SIX Interbank Clearing's website.

Debit Direct is the current direct debit scheme of PostFinance. With Debit Direct the debtor can authorize the biller to debit the amount due directly from his account.

Electronic credit advice of PostFinance resulting from slip-based electronic payment transactions.

Electronic payment order in proprietary format or ISO 20022 standard of PostFinance.

Swiss (RTGS) system for euro payments between banks within Switzerland & cross border, operated by SIX Interbank Clearing Ltd.

Settlements in payment systems (e.g. SIC), which are both unconditional and irrevocable, are designated as final (sending bank’s account debited, receiving bank’s account credited).

A transfer system in which the settlement of funds or securities transfer instructions occurs individually (on an instruction-by-instruction basis).

The Hash value is a compressed version of a file. It is created by compressing any file of any size using a mathematical process called a hash function.

Short for Hardware Security Module. All cryptographic operations in the SIC and euroSIC payment systems as well as in the SECOM securities settlement system using the private key take place in the HSM.

IBAN stands for International Bank Account Number and is the international standard for the presentation of account numbers. In order to rationalize cross-border payments, the ISO (International Organization for Standardization) and the ECBS (European Committee for Banking Standards) have created the IBAN. It simplifies the recording, transmission and processing of payment data.

The institution identification (IID) serves in Switzerland & Liechtenstein for the identification of institutions participating in the SIC & euroSIC system.

ISO is the largest worldwide organization that develops international standards. Specifically, it is a network of 162 national standardization organizations around the world, which elaborates international standards in various areas.

Credits with a maturity of less than a business day. Such credits are granted in order to facilitate the smooth processing of payments in payment systems. Intraday credits are usually provided interest-free by central banks.

The objective of this International Organization for Standardization (ISO) standard is to accomplish a global convergence of existing and new message standards from various segments of the financial industry. ISO 20022 not only includes payment transaction and account reporting messages, but also covers other areas, including securities trading, foreign trade and treasury.

An IS (inpayment slip) refers to the red payment slip used in Switzerland, with which money can be transferred to an account.

An ISR (inpayment slip with reference number) refers to the orange payment slip in Switzerland with which money can be transferred to an account. It contains a machine-readable encoding line that contains a participant number and reference number. The participant number ensures the crediting to the corresponding Post account. The reference number enables the creditor to identify the invoice recipient. In this way, the payment process can be handled entirely electronically, from the invoicing date to the booking of the amount at the creditor.

LSV⁺ is the process offered by the Swiss banks for the processing of direct debits with right of objection. It is suitable for companies that regularly collect amounts in francs or euro and which seek to offer their customers a simple and convenient mode of payment. LSV⁺ is used for both company and private customer business sectors and offers the best possible consumer protection through the right of objection.

A system in which transfer orders are settled on a net basis. Some systems distinguish between types of transfer orders and settle some, such as payment orders, on a net basis and settle others, such as securities transfer orders, on an instruction-by-instruction basis.

An agreed setoff of mutual positions or liabilities between business partners or participants in a payment system. Netting reduces a large number of individual positions or liabilities to a smaller number of positions or liabilities. Netting can take different forms; these claims are legally enforceable to a varying extent in case of default by a participant.

Payments Committee Switzerland. The committee is responsible for consulting and supporting financial institutions and SIX Interbank Clearing regarding product and market design and for communication. It also deals with the coordination and interest representation in national and international committees.

pacs (Payments Clearing and Settlement) denotes XML messages used between banks, which is defined in the ISO 20022 standard.

pain (Payments Initiation) denotes XML messages used between customer and bank, which is defined in the ISO 20022 standard.

The Customer Credit Transfer Initiation (pain.001) XML message is used for the electronic commissioning of payment orders by the customer to the payment submitting financial institution.

The XML message Customer Payment Status Report (pain.002) is used by the financial institution to inform customers about the status of pain.001 credit transfer orders or pain.008 collection orders that have been submitted.

The Customer Direct Debit Initiation (pain.008) XML message is used for the electronic commissioning of collection orders by customers to the financial institution. 

Project and IT Process Steering Committee. A standing committee reporting to the Board of Directors of SIX Interbank Clearing and mandated to ensure that the further development of payment systems services meets the banks' requirements. The PAP supports the banks and SIX Interbank Clearing in implementing strategies for joint projects and with the specification, development and operation of payment systems applications. It also rules on questions and problems that arise at the interfaces between the parties involved – the banks, SIX Interbank Clearing and the Swiss National Bank.

The clearing process, in which the payment order is transmitted from one financial institution to another, reconciled and, in some cases, confirmed. Processing also include the calculation of the gross or net position of each financial institution resulting from the execution of payment orders. See also: Clearing.

Payment versus payment: Mechanism in a foreign exchange processing system that ensures that the final transfer of one currency will occur if, and only if, the final transfer of the other currency occurs simultaneously as well.

The Quick Response Code (QR code) is a two-dimensional barcode. It consists of a square matrix of black and white dots that represent encoded binary data. Special markings in three of the four corners indicate the orientation.

The QR-IBAN is an account number that must be used to indicate the account to be credited for payments with a structured reference. The formal structure of this IBAN follows the rules of ISO 13616. The QR-IBAN contains the QR-IID of the account-keeping institution to identify the procedure.

The payment scheme with reference is recognized through a special financial institution identification (QR-IID). The values 30000 – 31999 are exclusively reserved for the QR-IID.  Each legally independent financial institution participating in the scheme is assigned one QR-IID.

Short for repurchase agreement. Sale of securities connected with a simultaneous repurchase of those same securities at a future date which may or may not be set.

Real Time Gross Settlement. Irrevocable settlement of each individual payment without settlement of a counterclaim.

Short for SIX Advanced Secured Server. The SASS system will be used for the SIC and euroSIC payment systems as well as for the SECOM securities settlement system. It guarantees the secure and unadulterated transmission of messages in the Swiss Value Chain within the Swiss financial center infrastructure and forms the interface between the Gateway application and the HSM hardware components (Hardware Security Module; Primus HSM S500).

Stammdatenverwaltung (German for master data management) of SIX Interbank Clearing. Administers the master data of the SIC & euroSIC systems.

SECB Swiss Euro Clearing Bank GmbH, Frankfurt. Multipurpose bank, specializing specifically in euro payment traffic and all related cash & collateral management services. It supervises and manages the Swiss RTGS system euroSIC.

Settlement Communication System: Online system of the Swiss banks for securities transactions both nationally and abroad.

Single Euro Payments Area. SEPA is the area of the EU/EEA member states plus Switzerland, where citizens, companies and other economic actors will be able to make and receive payments in euro, whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location.

The SEPA Credit Transfer Scheme is the payments scheme for making euro credit transfers across SEPA, as set out in the respective rulebook.

The SEPA Direct Debit Scheme is a pan-European direct debit system that enables merchants to collect euro payments from accounts in participating countries.

The actual fulfilment of the payment order, i.e. the transfer of the payment from the sender bank to the receiver bank is called settlement. This transfer is carried out via a central counterparty. It releases the debtor from its payment obligation.

Swiss Interbank Clearing: Swiss (RTGS) system for the payment traffic in francs between banks, operated by SIX Interbank Clearing Ltd on behalf & under supervision of the Swiss National Bank.

Operator of the Swiss RTGS systems SIC & euroSIC, in addition to other payment transaction services on behalf of banks for the Swiss financial center.

Straight Through Processing: refers in the realm of payment traffic to the automatic processing of payment transactions from the ordering party right through to the beneficiary. The acronym is also used in connection with securities trading but the process involved is different.

The percentage of transactions that are passed straight through the system. An STP transaction occurs when, after being generated and routed through all involved payment systems, it can be processed by the creditor’s financial institution without manual intervention.

Society for Worldwide Interbank Financial Telecommunications. Network operation facilitating the exchange of payments and other financial transactions world-wide.

Full electronic integration of securities' trading, handling and payment traffic through an association of the SIX Swiss Exchange, SIX Securities Services & SIX Interbank Clearing.

Trans-European Automated Real-time Gross settlement Express Transfer system. Clearing and settlement system of the European Central Bank, providing EMU member countries' central banks with same day payment settlement.

Extensible Markup Language (XML) is a markup language for the representation of arbitrary data structures. The ISO 20022 standard messages for the data exchange between customers and banks are based on XML.