The Oversight of Payment Systems

In Thailand, average daily values of payments have reached as high as Baht 250 billion, accounting for 5 percent of Gross Domestic Product. Thus, apart from their macro objective of price stability, central banks have increased their interest in maintaining financial stability as a micro objective, particularly in the core areas of the payment system. This paper aims to increase the understanding of this role in three ways. First, a conceptual framework is developed to group payment schemes into three levels and major payment systems are identified. Second, the central bank’s oversight of payment systems and their compliance with the BIS Core Principles are reviewed. And third, future challenges, particularly on the regulatory, technological and international fronts, are discussed.