Glossary of Terms

A payment service provider that, with user consent, accesses account information held at other financial institutions to provide consolidated data services such as balance inquiries or spending analysis.

A set of laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. Instant payment participants must implement AML programs to detect and report suspicious transactions.

A set of protocols and tools that allows different software systems to communicate with each other. In instant payment systems, APIs enable participants to connect their systems to the central payment infrastructure and provide open banking services.

A type of fraud where a victim is deceived into voluntarily sending money to a fraudster's account. Unlike unauthorized transactions, the payer initiates the payment, making recovery more complex.

A documented set of procedures and information that enables an organization to continue critical operations during and after a significant disruption. For instant payment systems, BCPs are essential to maintaining 24/7 service availability.

The national financial institution responsible for monetary policy, financial stability, and oversight of the payment system. In many African countries, the central bank also operates the national instant payment system or serves as the settlement institution.

The process of transmitting, reconciling, and in some cases confirming transfer orders prior to settlement. In instant payment systems, clearing typically occurs in real-time or near-real-time as part of the transaction processing flow.

Assets pledged by a participant to secure its settlement obligations. In instant payment systems, eligible collateral typically includes high-quality liquid assets such as government securities or central bank-eligible instruments.

Measures designed to prevent the financing of terrorist activities through the financial system. CTF compliance is a mandatory obligation for all participants in instant payment systems.

A payment model where the payer initiates and authorizes the transfer of funds to a payee. This is the dominant model for instant payments, as opposed to direct debit (pull) arrangements. Credit push payments enhance payer control and reduce unauthorized transaction risk.

A settlement model where transactions are accumulated over a defined period and settled on a net basis at specified intervals (e.g., every hour). DNS is more liquidity-efficient than RTGS but introduces settlement risk between settlement cycles.

A financial institution or payment service provider that establishes a direct technical connection to the instant payment system and is directly responsible for meeting all technical, operational, and compliance requirements defined by the Scheme.

A participant with direct technical access to the payment system but that relies on a third party (typically a larger direct participant) for settlement services.

A participant with direct access to both the payment system and the settlement mechanism, typically holding a settlement account at the central bank or designated settlement institution.

A set of policies, tools, and procedures designed to enable the recovery or continuation of vital technology infrastructure and systems following a natural or human-induced disaster. Instant payment systems must maintain robust DR capabilities to ensure operational continuity.

According to the Bank for International Settlements (BIS), a payment in which the transmission of the payment message and the availability of final funds to the payee occur in real time or near-real time on a 24-hour and seven-day (24/7) basis. Also referred to as real-time payment, immediate payment, or instant payment.

A multilateral system among participating institutions, including the operator, used for the purposes of clearing, settling, or recording payments, securities, derivatives, or other financial transactions. Instant payment systems are a form of FMI.

Financial technology companies that use technology to improve or automate financial services and processes. Fintechs are a key participant category in modern instant payment systems, often serving as direct or indirect participants, payment initiation service providers, or technical service providers.

A payment made by a government entity to an individual, such as social transfer payments, pensions, subsidies, or salary disbursements. Instant payment systems can significantly improve the efficiency, transparency, and inclusion outcomes of G2P programs.

A financial institution or payment service provider that accesses the instant payment system through a direct participant, rather than maintaining a direct technical connection. Indirect participants rely on their sponsoring direct participant for both technical access and settlement.

A payment in which the transmission of the payment message and the availability of final funds to the payee occur in real time or near-real time, available 24 hours a day, 7 days a week, 365 days a year. Instant payments are typically irrevocable once confirmed.

The overall framework — including rules, standards, governance, and technical infrastructure — governing the operation of an instant payment system. The scheme defines the rights and obligations of all participants and ensures interoperability across the ecosystem.

An international standard for financial messaging that provides a common language and model for financial communications. ISO 20022 is the globally recommended messaging standard for instant payment systems, offering richer data capabilities, extensibility, and support for future interoperability with regional and international payment systems.

Due diligence processes performed by financial institutions and payment service providers to verify the identity and legitimacy of business customers. KYB is particularly important for merchant and biller onboarding in instant payment systems.

Due diligence processes performed by financial institutions and payment service providers to verify the identity of their customers and assess potential risks. KYC is a fundamental compliance requirement for all participants and is essential for AML/CFT compliance.

The ability of a participant to meet its settlement obligations as they fall due. In instant payment systems, effective liquidity management is critical given the continuous, 24/7 nature of the service and the immediate finality of payments.

A financial institution that provides small loans and other financial services to low-income individuals and micro-enterprises that lack access to conventional banking. MFIs are an important participant category in instant payment systems supporting financial inclusion.

A provider of mobile money services, typically a mobile network operator or licensed financial institution, that offers digital wallet services accessible via mobile phone. MMOs are a key participant category in African instant payment systems, given their extensive reach into underserved populations.

A type of data-carrying technique for high-performance telecommunications networks that directs data from one network node to the next based on short path labels rather than long network addresses. MPLS is commonly used for secure, reliable participant connectivity in payment systems.

A limit placed on the maximum net debit position a participant can accumulate relative to its available prefunding or collateral. Net debit caps are a key risk management tool in instant payment systems using deferred net settlement.

A password that is valid for only one login session or transaction. OTPs are widely used as a second factor of authentication in instant payment systems, typically delivered via SMS or authenticator app.

A centralized payment and settlement infrastructure for intra-African trade and commerce established by the African Export-Import Bank (Afreximbank) and the African Union (AU). PAPSS enables African countries to make and receive payments in local currencies across borders.

The process through which a new entity is approved and connected to an instant payment system as a direct or indirect participant. The onboarding process typically includes application review, eligibility assessment, technical certification, testing, and go-live readiness validation.

A type of third-party payment provider that initiates payment orders on behalf of users from accounts held at other payment service providers. PISPs are a key participant category in open banking ecosystems.

A payment made by an individual to a business entity, such as a retail purchase, service payment, or fee payment. P2B payments are a major use case for instant payment systems and often involve QR codes, mobile POS, or e-commerce integrations.

A payment made between two individuals, such as a funds transfer between friends or family members. P2P payments are typically the first and most widespread use case for instant payment systems.

The practice of depositing funds in advance into a dedicated settlement account or pool before initiating transactions. Prefunding is used in many instant payment systems to manage settlement risk, particularly in systems using deferred net settlement.

International standards issued by the Bank for International Settlements (BIS) and the International Organization of Securities Commissions (IOSCO) for designing and regulating financial market infrastructures, including payment systems. The PFMIs consist of 24 principles covering governance, risk management, settlement, access, and transparency.

A system that maintains secure mappings between user-friendly identifiers (proxies) such as mobile numbers, email addresses, or national IDs and actual payment account information. Proxy directory services enable users to initiate payments without knowing the recipient's account number.

A two-dimensional barcode that can be scanned using a mobile device camera to initiate a payment. QR codes are widely used in person-to-business (P2B) instant payment transactions, enabling consumers to make payments at merchant locations or online.

A settlement model where each transaction is settled individually and immediately on a gross basis, typically through the central bank's RTGS system. RTGS eliminates settlement risk between transactions but requires high liquidity and continuous RTGS system availability.

A value-added service in instant payment systems where a payee sends an electronic request to a payer asking them to authorize a payment. R2P gives payers control over payment authorization while enabling payees to initiate the payment process.

The entity responsible for governing the instant payment scheme, including developing and maintaining scheme rules, managing participant eligibility and compliance, and setting the strategic direction for the scheme.

The core operational framework governing the day-to-day functioning of an instant payment system. Scheme rules define detailed parameters and procedures for governance, participant eligibility, payment processing, settlement, risk management, consumer protection, and dispute resolution.

The process of transferring funds between participants to discharge obligations arising from the exchange of payment messages. In instant payment systems, settlement may occur in real-time (RTGS) or on a net deferred basis (DNS), but the availability of funds to the payee is always immediate.

The irrevocable and unconditional transfer of funds from payer to payee. Settlement finality is a fundamental characteristic of instant payment systems — once a payment is confirmed, it cannot be reversed unilaterally.

The institution responsible for holding settlement accounts for participants and processing settlement transactions. In most instant payment systems, the central bank serves as the settlement institution, providing maximum settlement finality and eliminating settlement bank risk.

The risk that a party will fail to deliver an asset or funds as expected at the time of settlement. In instant payment systems using deferred net settlement, settlement risk exists during the period between transaction processing and final settlement.

An authentication process that validates the identity of a user based on two or more independent factors: something the user knows (e.g., PIN, password), something the user has (e.g., mobile device, card), or something the user is (e.g., biometrics).

The entity responsible for the technical implementation and day-to-day operation of the instant payment system infrastructure. In separated governance models, the System Operator manages the technical platform while the Scheme Manager governs the rules and compliance framework.

A formal process through which a prospective participant demonstrates its ability to connect to and operate within the instant payment system. Technical certification typically involves conformance testing of message formats and protocols, security architecture validation, and end-to-end transaction simulations.

An entity that offers technology infrastructure, integration services, or operational support to other participants in an instant payment system. TSPs help smaller or indirect participants access the system without building their own technical infrastructure.

An entity that provides payment services — such as payment initiation or account information access — to end-users without necessarily holding or settling customer funds. TPPs typically access payment accounts via open banking APIs.

The United Nations Commission on International Trade Law. In the context of instant payment systems, UNCITRAL arbitration rules are often referenced in participation agreements as the framework for resolving international commercial disputes.

A communication technology used by GSM mobile networks to provide interactive real-time services. USSD enables mobile users without smartphones or data connections to access financial services, including instant payments, through a simple menu-based interface. USSD is critical for financial inclusion in Africa.

Additional services offered by participants or third parties on top of the core instant payment infrastructure. Examples include Request to Pay (R2P), payment reminders, invoice management, loyalty programs, and cash flow forecasting.

A feature that allows the payer to confirm the recipient's identity (name and account details) before authorizing a payment. VoP is a key consumer protection measure that helps prevent misdirected payments and authorized push payment fraud.