International Payments - A 2 Day Course

International Payments Primer

We introduce participants to the key concepts, principles, and terms relating to international payments. Delegates are provided a fundamental understanding of the field and a foundation for comprehending more advanced or topic-specific subject matter delivered subsequently in the program.

The purpose of a Payment System

Characteristics of International Payments

The Payment Process

The Current International Payments Scene

Who Makes International Payments

Cross-Border Retail Payments

Definitions and Overview

Nature of Cross-Border Payments

Demand and Supply Sides

Key Features

Overview of the Cross-Border Retail Payments Market

The Demand Side

The Supply Side – Front End

Payment Service Providers

Types of PSPs of Cross-Border Retail Payment Services

End-to-End PSPs

Payment Instruments

Payment Cards for Cross-Border Payments

Service Channels and Access Points

Supply Side – Back End

Back-End Arrangements

Correspondent Banking Model

Interlinking Model

Closed-Loop/In-House/Intragroup

Peer-to-Peer Model

Use of the Blockchain

Contractual, Legal and Regulatory Framework

Market Preferences

Demand Side – Different Preferences

Demand Side – Expectations

Supply Side – Front End – Innovation, Cash preferences, challenges and standards

ISO 20022 and International Interlinking of Payment Infrastructures

Supply Side – Back End Messaging, Settlement, Improvements, Alternatives

Regional Integration Case Studies

Directo a México

EACHA

Arab Regional Payment System

SEPA

Interdiction & Enforcement Aspects of International Payments

International Payments & the Law

Local Laws

International Principles and AML Requirements

Financial Action Task Force (FATF)

Examples of Legal Payments Structures – The USA, The UK, European Union

Anti-Money Laundering

Suspicious Activities

High-Value Global Payments

TARGET2

CHIPS

TARGET T2-Securities

The Purpose & Role of SWIFT

SWIFT’s Evolution

Network & Transaction Volumes

Before SWIFT – How payments worked

What SWIFT is used for?

The Role of SWIFT in Payments

BICs

Straight Through Processing

FIN Services – How it works

SWIFTNet

SWIFT Message Types

Cross Border ACH (SWIFT through a CUG)

The FIN Message Dissected

SWIFT Standards XML: Comparing FIN & XML, SWIFT Global Payments Innovation (gpi)

Global Clearing & Settlement

A Study in complexity

Settlement Under Correspondent Banking

Foreign Exchange & Currency Principles

Foreign Exchange (FX) Terms

Nostro & Vostro

How Foreign Exchange Works – A Case Study

Exchange Rates – How rates are set, Supply & Demand, International Monetary Issues, Purchasing Power Parity

Foreign Exchange Issues: Gold Standard, National Fiat Money, Bretton Woods, Floating Rates

Alternative International Payment Systems

Hawala – What it is and how it works

A Case Study

Why is Hawala used?

Is Hawala Legal?

Hawala and Money Laundering

How the system can be misused

Workers’ Remittances

What are Remittances?

Who are the SenderS and the Receivers?

The Purpose, Role & Operation of CLS

This section deals with risks in International payments and the role of CLS in their mitigation.

International Payments and Risk

Herstatt Risk

What are all the Foreign Exchange Risks?

Settlement Methods and their Effect on Risk

The Mathematics of Foreign Exchange Settlement

How Exposures are Measured

The Foreign Exchange Settlement Process

Projecting FX Settlement Exposures

Duration of FX Settlement Exposures

Size and Duration of Exposures

Payment System Operating Hours & Time Zones

Continuous Linked Settlement

How CLS Works

Benefits of CLS

New CLS Services

CLS & Correspondent Banking

Liquidity Management

Traditional Tools of Liquidity Management

Managing Liquidity

Managing Liquidity Within a Bank System

Multi-Currency Liquidity Management

International Trade Facilitation

The Trade Process

Payments Within the Trade Process

Payments in International Trade

Documentary Credits & Documentary Collections

Linking Goods to Documents

Guarantees & Letters of Credit

Guarantees – types, uses and processes

Letters of Credit

Standby Letters of Credit

International Trade Financing Methods

Balancing cost and risk

Customer financing solutions – Letters of Credit, Documentary Collection

Risk Management in FX

What is Risk?

The Size of the Problem

FX Risks – Some Notes Case Studies

Managing Risks

Enterprise Risk Management

Implementing a Risk Management Policy

Operational Risk

Managing Operational Risk

Risk Analysis

Risk Appetite

Risk Impact Vs. Frequency

Risk Impact Vs. Probability

Regulation as a Payment System Risk

Advanced Legal and Regulatory Issues

Achieving an Efficient International Payment Service

UNCITRAL and its Model Law

FATF and International Payments

Corporate Perspectives & Challenges in International Payments

What Corporates Want

RosettaNet

Emerging Trends

How International Payments are Changing

What the Future may Hold

Trainer: Richard’s professional experience spans over 30 years. He started his career with Wells Fargo Bank, following by Fundtech and then moving to international advisory and consulting for the private and high-tech sectors providing high-level consulting, business analysis, project management and training to a wide range of banking clientele across the globe.

Over his career Richard was involved in International Trade Finance, Cross Border Payments and Settlements, Operational Risk, AML and Corporate Governance amongst others.

He has spent extensive time servicing a diversity of financial institutional clients in many countries including: UK, Ireland, China, Singapore, Hong Kong, Philippines, Korea, Malawi, Ghana, Nigeria, Kenya, South Africa, Poland, Sweden, Netherlands, Greece, Norway, Bermuda and across North America.

Clients that Richard has trained & consulted to include: JP Morgan, Abu Dhabi Commercial Bank, Qatar Exchange, Abu Dhabi Investment Authority, Central Bank of Egypt, Irish Gas, UBS, Central Bank of Ireland, Central Bank of Norway, Merrill Lynch, PGGM, BP, Asian Development Bank, African Development Bank, Instinet, Fundtech, European Central Bank, Brunei Investment Agency, British Steel Pension Fund, Salesforce and Tullet Prebon amongst others.