pan-European automated clearing house (PE-ACH)

A business platform for the processing of euro payment instruments which is made up of governance rules and payment practices and supported by the necessary technical platform(s).
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participant

An entity which is identified/recognised by a transfer system and – either directly or indirectly – is allowed to send transfer orders to that system and is capable of receiving transfer orders from it. See also   direct participant
  indirect participant
  remote participant
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payer

The party to a payment transaction which issues the payment order or agrees to the transfer of funds to the payee.
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payment

In a strict sense, a payment is a transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. However, in a technical or statistical sense, it is often used as a synonym for “transfer order”. See also   transfer order
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payment card

See   card (payment card)
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payment instrument

A tool or a set of procedures enabling the transfer of funds from a payer to a payee. The payer and the payee can be one and the same person. See also   means of payment
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payment lag

See   settlement lag (payment lag)
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payment order

An instruction sent by a payer or a payee to a payment service provider requesting the execution of a payment transaction.
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payment scheme

A set of interbank rules, practices and standards necessary for the functioning of payment services. See also   card scheme
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payment system

This term has two meanings. 1) In some cases, it refers to the set of instruments, banking procedures and interbank funds transfer systems which facilitate the circulation of money in a country or currency area. 2) In most cases, it is used as a synonym for “funds transfer system”. See also   funds transfer system
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payment versus payment (PvP)

A mechanism which ensures that the final transfer of a payment in one currency occurs if – and only if – the final transfer of a payment in another currency or currencies takes place. See also   exchange-for-value settlement system
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PE-ACH

See   pan-European automated clearing house (PE-ACH)
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pension fund

A provision or similar funds set aside by non-financial corporations to pay for their employees' pensions.
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percentage balance

The form in which the results of European Commission surveys are usually presented, namely as the difference between the percentage of respondents giving positive and that of those giving negative replies.
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personal identification number (PIN)

A personal and confidential numerical code which the user of a payment instrument may need to use in order to verify his/her identity. In electronic transactions, this is seen as the equivalent of a signature. See also   electronic signature
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physical delivery

Settlement of a derivatives transaction through the delivery of the underlying asset in exchange for payment.
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PIN

See   personal identification number (PIN)
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pledge

The delivery of assets in order to secure the performance of an obligation by one party (the debtor) vis-à-vis another (the secured party). For the secured party, a pledge creates a security interest (a “lien”) in the assets delivered, while ownership of the assets remains with the debtor.
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point-of-sale (POS) terminal

A device allowing the use of payment cards at a physical (not virtual) point of sale. The payment information is captured either manually on paper vouchers or by electronic means. See also   EFTPOS terminal
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portfolio investment account

A b.o.p. account which records cross-border investment in equities (quoted and unquoted shares) and debt securities (bonds and notes, and money market instruments), excluding amounts recorded in direct investment or reserve assets.
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position netting (advisory netting)

Netting of orders in respect of obligations between two or more parties which neither satisfies nor discharges those original individual obligations. Also referred to as “payment netting” in the case of payment orders. Antonym:   netting by novation
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post-fixed coupon

A coupon on floating rate instruments which is determined on the basis of the values taken by the reference index at a certain date (or dates) during the coupon accrual period.
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postal order

Money order in which the drawee is a postal institution.
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PPP

See   purchasing power parity (PPP)
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pre-fixed coupon

A coupon on floating rate instruments which is determined on the basis of the values taken by the reference index at a certain date (or dates) before the start of the coupon accrual period.
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premium

The difference between the par value of a security and its price when such price is higher than par.
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prenotification

In the field of direct debits, the advance notification provided by the creditor to the debtor as regards: 1) the amount of the next direct debit; and 2) the date of collection.
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prepaid card

A card on which a monetary value can be loaded in advance and stored either on the card itself or on a dedicated account on a computer. Those funds can then be used by the holder to make purchases. See also   multi-purpose prepaid card
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price risk

See   market risk (price risk)
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price stability

The primary objective of the Eurosystem, which has been defined by the Governing Council as a year-on-year increase in consumer prices (as measured by the HICP) for the euro area that is below but close to 2% over the medium term.
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primary balance

The general government sector’s net borrowing or net lending excluding interest payments on consolidated government liabilities.
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primary site

The place where systems operators locate the infrastructure and/or staff necessary to run their normal daily business operations.
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principal

An entity that acts on its own behalf, with its own funds and at its own risk.
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principal risk

The risk that the seller of a financial asset (e.g. securities or currency) will deliver, but not receive payment, or the risk that the buyer will pay, but not receive delivery. In such a situation, the full value of the securities or funds transferred is at risk. See also   delivery versus payment
  payment versus payment
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processing

The performance of all of the actions required in accordance with the rules of a system for the handling of a transfer order from the point of acceptance by the system to the point of discharge from the system. Processing may include clearing, sorting, netting, matching and/or settlement.
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projections

See   Eurosystem staff projections
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provisional settlement

The discharging of an obligation by means of a transfer of funds and/or a transfer of securities which is dependent on the fulfilment of certain conditions and can therefore be rescinded by one or more parties. See also   final settlement
  settlement
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provisional transfer

A transfer order is provisional as long as it can be revoked by the originator or as long as it can be reversed subject to certain conditions. See also   final settlement
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provisions

Amounts set aside before arriving at the profit and loss figure in order to provide for any known or expected liability or risk, the cost of which cannot be accurately determined.
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purchasing power parity (PPP)

The rate used for the conversion of one currency into another that equalises the purchasing power of the two currencies by eliminating the differences in the price levels prevailing in the countries concerned. In their simplest form, PPPs show the ratio of the prices in national currency of the same good or service in different countries.
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PvP

See   payment versus payment (PvP)
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