We administer Settlement Before Interchange (SBI) which is the SWIFT-based payment settlement and interchange system used by our BECS, CECS and PCS Participants (primarily banks).
SBI enables Participants of these clearing systems to settle payments and, once this has occurred, exchange the payment information with other Participants throughout the business day on a bilateral basis.
Settlement occurs multiple times throughout the business day and each settlement is closely followed by the exchange of the payment information (interchange) between Participants - Settlement Before Interchange.
For example, if you need to pay a business whose account is at another bank, you might set up a bill payment through your internet banking. Your bank will then take your payment request, along with those it has received from other customers, and create the payment instruction to send to the other bank. When this is sent, your bank pays the money to the other bank (called ‘settlement’) and once this payment between the two banks has occurred, the payment instructions are received and processed by the recipient's bank (called ‘interchange').
What is it?
We are working with the industry on a significant project to extend the settlement and interchange of financial transactions between banks. Once implemented, this will enable Kiwis to make and receive electronic payments between accounts across different banks every day of the year.
Why are we looking at it?
Technological advancements have given rise to a highly connected world that is always on, underpinned by continuous economic activity. This uninterrupted environment is changing the way people work, run their businesses and go about their day-to-day lives. In response to this trend, many industries are under pressure to meet customer expectations for improved service. The payments industry is no exception and there is increasing demand to meet the “always on” expectations of customers.
Today, our bulk electronic transactions between financial institutions generally operate over a traditional five-day business week.
Where we’re currently at
Due to complexity and the varying nature of the system changes required by banks we are currently working with our Participants to confirm an industry implementation timetable. More information will be provided on next steps as they become available.
Bulk Electronic Clearing System
BECS governs how direct debits, automatic payments, bill payments, and direct credits work.Read more
Consumer Electronic Clearing System
CECS governs how consumer payments work, such as EFTPOS payments and mobile payments.Read more
Paper Clearing System
PCS governs how all paper-based payment instruments work, such as cheques.Read more