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Clearing Systems

Did you know

New Zealanders make more than six million payments daily, estimated to be worth more than $35 billion each day.

Did you know

Payments NZ has recently delivered a project to support the industry through its progression to mobile payments.

Bulk Electronic Clearing System

This system covers direct debits, automatic payments, bill payments, direct credits, and a few others.

For example; if you make a direct credit to a person/business, and they use a different bank/financial institution to you, the two financial institutions have to ‘talk’ to each other in order to pass the relevant information to each other regarding that payment (called interchange), and also to pass the money over from one financial institution to the other (called settlement).

BECS sets all the requirements (rules / standards) for how financial institutions actually make these transactions happen. This includes components like;

  • how ‘cleared funds’ works
  • the data format for transaction information,
  • how transaction data is exchanged
  • timeframes for interchange and settlement – what has to happen by when
  • how dishonours work – what information is exchanged, by when
  • contingency
  • operational contacts
  • How settlement occurs and by when

The same processes occurs between all institutions, irrespective of how the transaction was initiated by the customer (i.e. it does not matter if the customer initiated the transaction in a branch, on the phone, online banking, DD, etc)

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