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<p>
  A &ldquo;payment system&rdquo; means a system that enables payment to be  effected between a payer and a beneficiary, involving clearing, payment or  settlement service or all of them.</p>
<p>[http://www.investopedia.com/terms/c/clearing.asp <strong>Clearing</strong>]<strong> </strong>refers to the process wherein the payment service provider acts as  the counterparty between the buyer and seller by calculating the obligations  between them and guaranteeing its settlement. <strong>Settlement </strong>relates to the final act of changing the records of  ownership of the asset transacted, either after [http://www.investopedia.com/terms/n/netting.asp netting] all the cross obligations or for each one transaction  individually on gross terms.</p>
<p>  A &ldquo;payment system&rdquo; as understood in India, can include the systems  enabling credit card operations, debit card operations, smart card operations,  money transfer operations or such similar operations. All entities operating  such systems (money transfer systems or card payment systems or similar  systems) are known as payment system providers. To decide whether a particular  entity operates the payment system, it must perform either the clearing or  settlement or payment function or all of them.</p>
<p>  The [https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/86706.pdf Payment and Settlement Systems Act, 2007] (PSS Act, 2007)&nbsp;which came  into force with effect from 12 August 2008, provides for the regulation and  supervision of payment systems in India and designates the Reserve Bank of  India (Reserve Bank) as the authority for that purpose and all related matters.  The Act excludes stock/commodity exchanges and their clearing corporations from  the purview of the Act, even though they constitute payment systems. Stock  /commodity exchanges and Clearing Corporations are regulated by the securities  market regulator – SEBI -in India. </p>
<p>  Reserve  Bank of India has issued Certificates  of Authorisation under the Payment and Settlement Systems Act, 2007 for Setting  up and Operating Payment System in India.   The names of entities which have received such certificates and the  names of their payment facilities are given on the [https://rbi.org.in/scripts/publicationsview.aspx?id=12043 website of RBI]. </p>


==Also See==
*[http://www.arthapedia.in/index.php?title=Unified_Payments_Interface_(UPI) Unified Payments Interface]
* [http://arthapedia.in/index.php?title=Pre-paid_Payment_Instruments_(PPIs) Prepaid Payment Instruments (PPIs)]
* [http://arthapedia.in/index.php?title=Payment_System Payment System]
* [http://www.arthapedia.in/index.php?title=Digital_/_Electronic_Wallet_(e-wallet) Digital Electronic Wallet]

==References==
[https://www.rbi.org.in/scripts/FAQView.aspx?Id=73 FAQ of RBI] on Payment and Settlement Systems Act, 2007

==Contributed by==
* [http://www.ies.gov.in/myaccount-profile-view.php?memid=338 Rosemary K Abraham (IES 2006)]
*Email- [mailto:rosemary.a@nic.in rosemary.a@nic.in]

[[Category:concepts|PaymentSystem]]