Every forex (foreign exchange) transaction involved the transfer of funds between two nations and that means that it also involves the payment and settlement systems of the two countries concerned in the transaction. For this reason national payment and settlement systems play a key role in the day to day operations of the forex market.
Today there are a wide variety of payment systems which are legally acceptable within the United States and payments can be made for example in cash, by check, using an automated clearing house or using an electronic funds transfer.
In terms of the sheer number of transactions the vast majority of payments in the United States today are made in cash or by check, however, in terms of value, the greatest amount of money is paid by electronic funds transfer. For this reason the electronic funds transfer system is a key component of the Unites States payment and settlement system and it is this system which is used to make inter-bank transfers between dealers in the forex market.
There are two main electronic funds transfer systems operating in the United States today. The first is the Clearing House Inter-bank Payments System (CHIPS) which is a private system operated [...]
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Filed under Forex by on Aug 1st, 2008. Comment. 