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  Common Interview Questions: Now that the payments job market is booming and there are lot of interviews happening, I thought of compiling a list of questions that you might get in an interview. Note:  This list is not exhaustive and must be used at the final stage of preparation. Most of these questions were directed at me during my years of being interviewed. If you know the answers to all of these, then you should be good  What is SWIFT?   Answer:  SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. It is a co-operative of banks that provide the infrastructure and standards for the exchange of payment messages, especially in the cross-border space. SWIFT has a proprietary message type called  MT messages. What are the differences between SWIFT and SEPA?   Answer:  SEPA stands for  Single Euro Payments Area  which was created by the European Union to make the exchange of payment within the EU easy. SEPA deals...

  Misc Payment Concepts Now that we have seen how payments and payment processing work in general, we can now move on to understand some payment-related terminologies with some examples. These are crucial to further our understanding of the different payment systems. SWIFT SWIFT  stands for  Society for Worldwide Interbank Financial Telecommunication . It is a co-operative of banks that provide the infrastructure and standards for the exchange of payment messages, especially in the cross-border space. SWIFT has a proprietary message type called  MT messages.  More about this in the future. A0701 SEPA SEPA  stands for   Single Euro Payments Area   which was created by the European Union to make the exchange of payment within the EU easy. SEPA deals with only payments in EURO currency. SEPA uses a version of the ISO20022 standard for the exchange of payment messages. More about this in the future. A0702 ISO20022 This is a standard published by the I...

  Charges and FX This article will attempt to understand how different charges are collected by the bank during payment processing. Charges are one of the ways banks make money, FX is another. Although FX is a huge topic by itself, we will try to understand it in the context of payment processing. Charges The first point to note is that the  bank transfers  will not have any associated charges. Only  Customer transfers  will have charges. Every bank will levy charges in different names, but we will add them all and identify them as  ‘that bank’s charges ‘ for simplicity. Every country/region will have its own rules for charging the customer. We are going to discuss the most common charging methods. In the case of a simple credit transfer payment, both the ordering customer’s bank and beneficiary customer’s bank will have their charges. The question now is, who is going to bear the charges? There are three types of charging methods: OUR/DEBT SHA/SHAR BEN/CRE...

  Payment Engines: I am really excited about this topic as it’s my favorite and the one in which I have the most experience. In this article, we will be discussing about a piece of software called “payment engine” . They are part of the bank’s IT ecosystem and they help banks process hundreds of thousands of payments a day seamlessly. In the previous articles, we discussed the different message types and how banks send these messages to each other. Payment engines help banks to send, receive and process payments. We will discuss only credit transfers here. Direct debits can be parked for the Future. We will approach this subject  without any particular payment engine or message scheme in our minds . Once we get the bigger picture knowing specifics will be much easier. A0501 From a payment engines’ perspective there are 4 types of payments: Incoming Outgoing Book Redirect We will briefly see what these types are and then dive right into the flows. Banks processes each of these ...

  Accounting Entries in Payments As promised in my previous article, in this one we will talk about how money moves from one party to another. Before we start, let me introduce you to a few terms that will be used throughout this article. Debit  – Money being taken from your account Memory Aid – When you pay for something your account is debited Credit  – Money being added to your account Memory Aid – When you receive your salary your account is credited Let us get one more question out of our way. What are accounting entries??? It is a process of keeping track of the different credits and debits in a transaction. As a rule, you can always say that the total sum of debits should be equal to the total sum of credits.  We also need to understand  4 types of accounts that aid in the  transfer of funds . NOSTRO VOSTRO MIRROR NOSTRO MIRROR CLEARING ACCOUNT (Clearing Account) NOSTRO  – Citi bank opens an account with AXIS bank (We will look at the why part i...