Overview of the payment system

In this chapter, we will build a payment solution to be integrated in mobile banking apps. This solution will let customers send payment using a cell phone number. Sending payments to anyone in the world using just a cell phone number would be the most friendly way to send payments.  

Our solution will use digitalized fiat currency for the settlement and clearance of InterBank transfers. To understand why we choose to use digitalized fiat currency as the medium of settlement, let's understand how the settlement and clearance is done for InterBank transfers and its issues.

Settlement and clearance of InterBank transfers

Let's first understand how domestic InterBank transfers work. Every county's central bank has one more different types of centralized electronic fund transfer systems. For example, the Immediate Payment Service (IMPS) in India, Automated Clearing House (ACH) in the US, and Electronic Funds Transfer (EFT) in Canada. These systems are used by the...