Datasheet

8 Part I  Overview of Commerce
Deposits
Commercial
Checking
Cash
Management
Wire
Transfer
ForeX
Retail or
Consumer Banking
Wholesale or
Commercial Banking
Loans
LOC
Commercial
Lending
Equipment
Leasing/Fin.
Investment
Banking
Savings
Checking
CDs
Credit Cards
Mortgages
HELOCs
Auto
Loans
Insurance Securities
Banking
Figure 1-1: Financial services overview
At a very high level, a financial transaction takes place when a consumer
(buyer) exchanges value with a merchant (seller). The buyer and seller are two
of the main actors of both traditional commerce and e-commerce. The third
actor is the financial institution (FI), which facilitates the value movement and
charges the seller, the buyer, or both. All financial institutions (such as banks)
operate within constructs called payment networks. As the term implies, a pay-
ment network is a networked system that facilitates the transfer of money (value)
and cash-substitutes (prepaid cards, gift cards, and so on).
There are different types of payment networks; depending on the classi-
fication of financial institution, the nature of the transaction and the type of
financial instrument (FI) used for the transaction, a different payment network
is deployed. This is illustrated in Table 1-1.
Table 1-1: Payment Networks
FINANCIAL
INSTRUMENT NETWORK EXAMPLES
Checks Check clearing houses
Credit cards Credit card networks Visa, MasterCard, Discover, AMEX
Debit cards Debit card networks STAR, LiNK, INTERLINK, Pulse, DK,
NYCE, Electronic Cash, LASER, ACH
(in the United States)
Direct debit/
credit
Clearing house network
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