All market transactions essentially consist of two elements. The first arises when the seller delivers a good, a service or a financial instrument to the buyer. The other element is the payment, i.e. a transfer of money from the buyer to the seller. The two elements can occur simultaneously or at different times. Payments can be made either with cash or as transfers between accounts. Today, the value of cash transactions in Sweden is negligible in relation to the value of account-based transfers.
Account-based payments require the participation of a payment intermediary, principally banks and clearing organisations. When an account-based transfer is carried out between customers in one and the same bank, the bank’s internal system is used. Some payments are also made in this way. In most cases, though, the sender and recipient have accounts in different banks. That makes it necessary to have a payment system – that is, an infrastructure – between the banks so that the payment instructions can be processed and the payments can reach the correct recipients relatively quickly.
A payment system normally comprises a set of accounts, a regulatory framework governing how transaction details may be coded, and various computer systems for communication and for handling the actual transfers, or payments. The Riksbank’s RIX system is the hub of the Swedish payment system. All banks have access to accounts in RIX, either directly or via an intermediary, a clearing bank. When the banks make payments to each other they do so by transferring the funds via their accounts in RIX. Statistics for payments in the RIX system can be found under the link “Payments in RIX”.
Payments can be made using different types of payment instrument, which in turn can be handled by different kinds of payment system. A more detailed description of the payment infrastructure can be found under the links “Financial stability/Financial infrastructure”.
The Riksbank compiles annual payment statistics for the Swedish financial infrastructure. The statistics are published in two international publications called Blue Book and Red Book. More information about these publications can be found under “Payments in Sweden and other countries”.
The participants in RIX are the major Swedish banks and a number of clearing organisations. These clearing organisations are in themselves important components of the payment system and the financial infrastructure.
VPC (the Swedish central securities depository) is the organisation that manages the exchange of money for securities as regards transactions in the equity market and fixed-income market.
For equities and derivatives in Sweden, the Stockholm Stock Exchange is an important part of the financial infrastructure. However, it is primarily through its function as central counterparty and clearing organisation for derivative instruments that the Stockholm Stock Exchange is significant to the stability of the financial system.
BGC is the clearing organisation that handles a large proportion of Sweden’s retail payments.
There are also two international systems of interest.
Continuous Linked Settlement, CLS, is a system for clearing and settling foreign exchange transactions. The Swedish krona is one of the currencies in CLS.
In addition to the RIX system for Swedish kronor there is a system for handling payments in euro, E-RIX. This system forms part of a network of payment systems in the EU, known as TARGET (Trans-European Automated Real-time Gross settlement Express Transfer system).