IPAY – low value payments processed

5. Non-urgent payments, takes up to 3 days to process the transaction until money reaches account

(e.g. salaries, pension payments, direct debit)

5. High value payments would use FTS (funds transfer system) which deals with individual files which are paid on the same day, as opposed to IPAY which processes large volumes of files and takes 3 days for money to enter the account.
5. The client (e.g. eBay) initiates a payment Instruction file to IPAY who executes the payment.
5. Before the transaction is processed via IPAY, it must go through sanctions screening and GFC (global funds control.)
5. Sanctions screening of the beneficiary receiving the money – (American Bank; must follow American legislation, as well as GB and EU economic sanctions.) They filter transactions and customers against sanctions and watch lists electronically. (Firco.)
6. Global Funds control – checks they have enough money in their account to make the payment (electronically.)
5.  Must validate that the payer in the instruction is a valid customer with a usable debit account.

5. After being processed by IPAY, an instruction is sent to either the clearing or partner bank. JP Morgan uses the partner Bank RBS, which processes the transaction to the beneficiary Bank (costs less than to go through clearing.)
5.   The clearing of payments is necessary to turn the promise of payment (in the form of an electronic payment request) into the actual movement of money from one Bank to another. BACS (Bankers’ automated clearing service) payments take three working days to clear: they are entered into the system on the first day, processed on the second day, and cleared on the third day. (Therefore non-urgent payment.) The client’s bank would be debited to make a payment to the Beneficiary’s bank.
5. Clearing can reject payments

5. If it is a direct debit transaction, the client (e.g. Netflix) makes a request via IPAY which instructs the clearing to take money out of the sender’s account. This requires a pre-authorization with mandates and so the money moves into the client’s account.