WO2001063498A2

WO2001063498A2 - Method of and system for mitigating risk associated with settling of foreign exchange and other payments-based transactions

Info

Publication number: WO2001063498A2
Application number: PCT/GB2001/000802
Authority: WO
Inventors: Kathleen Tyson-Quah
Original assignee: Tyson Quah Kathleen
Priority date: 2000-02-25
Filing date: 2001-02-23
Publication date: 2001-08-30
Also published as: US20050015329A1; US7716097B2; US20020152156A1; AU3577101A; US20040230510A1; US7536326B2; US7822663B2; US7523054B2; US20040236677A1; US20040236687A1; US7283977B1; US7536347B2

Abstract

A real-time, global system and method for controlling payments risk, liquidity risk and systemic risk arising between financial counterparties active in payments-based transactions. The system comprises: a plurality of User Host Applications for use by plurality of Users; a plurality of Third Party Host Applications for use by plurality of Third Parties; and a plurality of Payment Bank Host Applications for use by a plurality of Payment Banks operating a plurality of domestic payment systems. All host applications communicate via cryptographically secure sessions via private communications networks and/or the Internet global computer network. User and Payment Bank access is secured by digital certification. Each Payment Bank Host Application has a mechanism for processing payment messages, including payments instructions to be carried out in its domestic payments system on behalf of a plurality of account holders (including bank correspondents).

Description

METHOD OF AND SYSTEM FOR MITIGATING RISK ASSOCIATED WITH SETTLING OF FOREIGN EXCHANGE AND OTHER PAYMENTS-BASED TRANSACTIONS

Background Of Invention

Field of Invention

The present invention relates to an improved method of and system for mitigating payments πsk, liquidity πsk and systemic πsk in the settlement of foreign exchange transactions and many other payments-based transactions.

Brief Description of Pπor Art

Payments made through large value payment systems in all currencies globally total more than $4 trillion a day in average values. These payments are made up of individual payment transactions relating to specific underlying payment obligations incurred through trading in foreign exchange and financial markets, commercial lending operations, and trade in goods and services Payments are all effected through the domestic payment systems operated within each currency area.

Participation in payment systems is generally limited to larger banks. Participant banks make payments to one another in these payment systems and other market participants, smaller banks and foreign banks will hold accounts with participant banks to effect payments on their behalf.

"Payment risk" aπses in any case where one financial market participant makes payment(s) to another financial market participant in expectation of later receipt of other payment(s) m return, whether m connection with the same or different financial transactions. The expected receipt of payment may be in the same currency or in a different currency.

Failure to receive expected payments from a financial market counterparty or his lntermediaty - whether arising from operational causes such as computer failure, financial causes such as llhquidity, or legal causes such as bankruptcy - can cause substantial harm to financial market participants They will suffer the effects of an unexpected shortfall equaling the amount of the failed payment. In the best case, this will imposes costs associated with borrowing or funding the amount of the shortfall, and in the worst case may cause contingent failures to pay their own obligations which were dependent on receipt of the expected funds The ease with which llhquidity and loss of confidence can spread in financial markets itself creates the πsk of system-wide disturbances from a single payments failure, known in the industry as "systemic risk".

The single greatest component in payments traffic is settlement of payment obligations arising from foreign exchange trading. The foreign exchange (FX) markets in our world trade over S I trillion worth of capital currencies daily Economic order throughout the global banking system generally requires that parties engaging m such foreign exchange transactions make payments due thereunder m a timely manner to prevent default and the consequences associated therewith.

As shown in Fig. 1 , the conventional method of making payments m connection with foreign exchange transactions, takes place over a standard 3 day cycle. On the Trade Date, various foreign exchange transactions are dealt either by telephone or electronic execution system between a User of the GPM system and a market counterparty. This is followed by the exchange of MT300 messages, in a prescribed industry data format, via a global bank communications network maintained by the Society for Worldwide Inter-bank Financial Transmissions (S.W.I.F.T). This global bank communications network, commonly referred to as the SWIFT network, is a proprietary value added network (VAN) which use electronic data interchange (EDI) message format standards. The International Standards Organization (ISO) recognizes S.W.I.F.T. as the organization responsible for the promulgation and maintenance of these message standards withm the global banking industry.

Once the MT300 messages are matched in each party's back office, each party generates a payment instruction for the sold currency and a pre-advice for the bought currency to a bank's own branch, or a correspondent bank holding an account for the bank in a foreign currency. Where banks make payment using correspondent banks, they undertake payment for their own account, whether or not they are involved in an underlying transaction as principal or agent of a non-bank market participant. The message types most important to payments include the MT200 for own account payments, MT202 for general commercial payments, and MT210 Pre -advice of expected receipt of funds.

The correspondent bank uses the S.W.I.F.T. network to confirm transactions in an account back to the account holder. The most important messages for this purpose are the MT900 advice of debit to account, MT910 advice of credit to account, and MT950 statement of daily account activity. In short, correspondent banking is a mechanism used by banks to effect payments m currencies other than their own.

All payment message types reference the paying bank, the account holder (if any), the receiving bank, the counterparty account holder (if any), and the Transaction Reference Number, a unique number identifying the underlying transaction using the prescribed industry data format. Messages to correspondent banks are sent using the S.W.I.F.T. network. Messages in domestic payments systems are sent using the network facilities and formats prescribed by the individual domestic payment system

Payments within domestic payment systems are currently managed by the construction of a queue of payments messages for a particular day within a bank directly linked to a domestic payment system. Liquidity management software is used to control the flow of payments messages from the queue mto the domestic payment system for clearance, to monitor balances at the central bank, and to monitor payment conditions vis-a-vis other directly participating banks. The liquidity management software allows payments to proceed according to the priority of individual payment messages and the liquidity available in the system.

Settlement Date is normally two business days after Trade Date for spot transactions m foreign exchange, and can be much later for forward transactions. On the Settlement Date, each branch of a bank operating the link to the domestic payment system for a currency, or each correspondent bank acting as a nostro for other banks' payments in a currency, will construct a payments queue containing all the messages requiπng payment on that date.

Where the payments are to be made via a real-time gross payment system or other system accommodating payment instructions on a real-time (as opposed to batch process) basis, the payments are released one by one as sufficient liquidity in the clearing account of the bank permits. Liquidity management software is used by banks connecting to these systems to keep track of the balance in the clearing account within the payments system and release payments as liquidity permits. Also, such software will generally ensure that sufficient balance or credit exists in the account of the account holder to cover the payment. Such software shall hereinafter be described as "liquidity/payments manager." Payments made from the queue reduce the balance, while payments received from other banks in the system increase the balance. The process continues until all payments on the queue are sent.

Banks acknowledge payments and receipts to their correspondent banking account holders using the S.W.I.F.T network, and to non-bank account holders using various methods. For correspondent banks, an MT900 is sent following debit of a payment from a client's account. An MT910 is sent following credit of a received payment to a client account. At the end of the day, an MT950 statement of account activity is sent to confirm every debit and credit through the account during the day, and the opening and closing balances, using an industry standard data format.

The Reconciliation Date is normally the day following the Payment Date. Institutions active in the foreign exchange markets typically take all the MT950 statements from all branches and correspondent banks acting on their behalf for settlement, and provide these statements as inputs to a batch process for reconciliation. This process determines whether for each payment made in respect of a trade, whether a counterpayment was duly received as expected. If payment has been made, but no counterpayment received, then the party is at risk for the gross amount of the payment as an unsecured creditor of the counterparty. An exceptions report is generated as a result of the reconciliation batch process, which is used for querying missed payments with counterparties, generally by telephone. Only after a query (often made difficult by geographical distance and time zone differences) can a decision be made about the credit-worthiness or potential default of a counteφarty. As a result it can be two or three days following missed payments before a counteφarty is declared m default and further payments are suspended. As a result of this process overall, the risk to a foreign exchange market participant, arising because payments are typically instructed on a transactional basis (as obligations are incurred) and are processed independent of other transactions which would result m expected receipts, may be as much as three days gross value of payments to a counteφarty. This risk is known as "cross-border settlement risk" and is a variety of the broader category of "payment risk".

Payments risk may well exceed the capital of a bank or other financial institution, raising a potential that a counteφarty failure could cause their own insolvency, arising from the difficulty that financial institutions are likely to have raising funding rapidly to cover a shortfall should expected receipts fail to materialize on the payment date. This risk is known as "liquidity risk".

Liquidity risk, in turn, may peφetuate a systemic impact throughout the chain of counteφarties active m the financial markets, arising from payment failure due to liquidity problems, through a chain of co-dependent payments transactions. This risk is known as "systemic risk" and is a principal concern of central bankers and supervisors in overseeing the strength of capital markets Payments risk, liquidity πsk, and systemic πsk associated with participation in payments systems are summarised in the table of Fig. 2.

Cross-border settlement risk in the foreign exchange markets has been exacerbated by recent trends in the markets. Many smaller participants now trade directly in the markets through electronic foreign exchange trading systems. The past five years have seen the market share of the top dealing banks fall from approximately 60 percent of the market to less than 40 percent of the market, demonstrating their displacement by more active smaller institutions. These smaller institutions tend to have lower credit ratings, and so present higher levels of payments risk to their counteφarties. Additionally, there has been a shift toward increased trading volumes in the currencies of emerging economies. These currencies are generally less liquid and more volatile, particularly in conditions of general market uncertainty, and so present higher liquidity risk and systemic risk in the event of a financial failure

In addition, there has been a movement toward more rapid settlement of transactions, with some transactions now settling on the same day as trading or the next day, as opposed to the customary two days following trade date. The shorter settlement times put pressure on banks involved m payments as they increase uncertainty as to liquidity, and are often inconsistent with existing systems for trade processing and reconciliation

Hitherto, a number of prior art systems and methods have been proposed for mitigating or managing the various types of πsk associated with making payments m connection with foreign exchange transactions in our global financial capital market system.

One proposed method of managing payment risk involves the "contractual netting" of payment flows, whereby parties agree to net all payment obligations for any given date and only effect net payments to one another. Contractual netting requires that both parties sign an enforceable legal agreement to net their obligations, that the parties agree daily the specific amounts of the payment flows in settlement of transactions, and that the parties maintain systems for the reconciliation of payments against transactions to ensure that underlying transactions have been settled. Supervisors generally require independent legal opinions supporting netting enforceabihty before conferring any benefit of risk reduction for capital adequacy puφoses. In consequence of its complexity and legal uncertainty in many countries, contractual payments netting embraces only one-quarter of transactions in foreign exchange markets.

In connection with the above method of risk management, a system referred to as FXNET exists for the calculation of bilateral netting exposures and net payment amounts in traded currencies for its participants This system is designed to reduce the operational complexity of bilateral netting on a daily basis as between its users. It has less than 100 bank users.

In addition, two other systems have been proposed for providing multi-lateral netting, or clearing house, operations to the foreign exchange markets The first system is the MultiNet system which never became operational, and was abandoned in late 1996. The second system is the Exchange Clearing House (ECHO) which was operational for several years, but operations were suspended in 1998 because they were deemed uneconomic.

CLS Bank has proposed an alternative method of managing risk m connection with foreign exchange transaction payment systems. This method involves developing a clearinghouse which seeks to provide a tiered system for clearing foreign exchange settlements, ending with value-for- value settlement of foreign exchange transactions through the agency of a special puφose bank with accounts at participating central banks. CLS Bank's clearinghouse is only effective for transactions wholly in the currencies admitted to the system (i.e 7 currencies are proposed for initial operations), only market participants joining the CLS system or clearing through participants, and only for foreign exchange settlements The CLS system requires substantial investment and changes to existing systems for reporting and matching of transactions, and for payment and liquidity management among participants Even if CLS Bank were to settle all eligible foreign exchange trades for all its 60 shareholder banks, this would only address the πsk on 27 percent of foreign exchange market transactions

Although the foreign exchange markets account for the single greatest proportion of payments, they represent only about half of all payments by value. Banks assume risk on one another in domestic payments systems for all their payment transactions with one another. The πsk arises because payments are generally made and received through domestic payments systems ithout regard to the payment imbalances which may accrue between any two payment intermediaries or account holders Hitherto, a number of pπor art systems and methods have been proposed for mitigating or managing domestic payment risk associated with making payments in domestic payment systems.

One proposed method of managing payment πsk involves the netting of payment flows throughout the operating hours of a payment clearing house, with settlement of the net balance by transfer of funds periodically during the day or at the end of the day. Participating banks agree with one another contractually to net all payment obligations for any given date as payments are processed by the clearing house. This method requires both banks involved in a payment to be participants of the clearing house and to route payments through the clearing house.

A bank participating m a net clearing house for payments processing will incur a payment risk exposure on any other bank participant for the net imbalance of payments in its favour pending actual transfer of the funds m settlement of the net payment obligation. Some clearing houses impose bilateral net debit caps on their bank participants to limit the amount of exposure thus assumed during the day. Others additionally provide collaterahsation, guarantee or loss-sharing schemes which contractually allocate the losses which may arise m the event that a participant's default on its net payment obligations.

Real-time gross payment systems provide for the real-time transfer of cash balances on the books of a central bank, providing instant finality of payment m cleared funds. Banks participating in these systems must have cash balances available with the central bank to cover payment instructions, or have secured overdraft or collaterahsed lending facilities to cover any shortfall. Real-time gross payment systems therefore create greater pressures on liquidity during the business day, as payments may be blocked from timely processing due to inadequate liquidity. Each bank will be dependent on the payment performance of other banks for the liquidity required to enable release of payments, with disruption transmitted very rapidly throughout the system m the event of a persistent payment failure by any one participant, whether due to operational or credit conditions.

Overdraft and collaterahsed lending facilities are the principal methods for managing intraday liquidity demand in real-time gross payment systems Overdraft facilities expose a central bank to the risk of loss in the event of a payment failure, so are generally limited m amount and only available in some few currencies. Collater sed lending facilities require the posting of securities, typically government bonds, as collateral for overdraft facilities in the payment system. Collaterahsation creates an added expense for bank payment processmg and a drain on the liquid securities available to the participating bank to pursue other business

A further variation of domestic payment systems arises in some systems where individual banks are very dominant. These banks may hold accounts for a substantial portion of commercial and financial entities making payments m the currency, and may therefore be in a position to accomplish payments on behalf of account holders by transferring balances between accounts on their own books without recourse to domestic payment channels. These so-called "book transfers" should be considered a further payment channel, but are governed by the rules created by the bank itself.

Whatever the nature of a payment, in the case that a financial market participant is not itself a direct participant in a payment system, it will rely on a bank as intermediary to effect the payment on its behalf through an account with the bank. In such cases, the account holder has very limited control on the timing of the payment and the risk it may incur on other payment counteφarties or intermediaries in the currency.

The only method currently available to account holders for control of payment risk today is the withholding of payment instructions until confirmed receipt of expected payments is recorded. This process, used by only a handful of market counteφarties in a handful of currencies, creates a systemic llhquidity problem. The withholding of payments by these few indirect participants impairs the liquidity available to their payment counteφarties, and by extension the payment system as a whole

All payments transactions to financial market participants who are not direct participants in a domestic payment system will involve one or more intermediary banks in the chain of accounts to the ultimate payment beneficiary. Payment risk will arise on these intermediary banks as payment to the ultimate beneficiary is dependent on their performance. For this reason it is important to be able to separately identify and control πsk on financial institutions as payment intermediaries.

In summary, prior art methods of and systems for managing risk in connection with FX and other payments transactions throughout the world suffer from the following shortcomings and drawbacks: they require agreement of the transaction counteφarty; they do not extend to non-bank counteφarties; they are complex and difficult to implement; and they do not adequately enable a typical foreign exchange or other market participant to control the risk arising in respect of the plurality of its counteφarties, currencies and payment types.

Consequently, there is a great need in the art to provide an improved method of and system for mitigating risk associated with participation in payments systems involved in settling foreign exchange and other financial transactions.

Objects of the Present Invention

Accordingly, a pπmary object of the present invention is to provide a global computer-based method of and system for mitigating risk arising in connection with foreign exchange settlements and other payments between financial market participants, while avoiding the shortcomings and drawbacks of pπor art methodologies.

Another object of the present invention is to provide such a system, wherem the control of payments πsk is efficiently enabled m as many currencies as may be interoperable with such a system. Another object of the present invention is to provide such a system, wherein the control of payment πsk is efficiently operated for a plurality of payment systems m each currency, including book transfers in settlement of payment obligations within a single bank.

Another object of the present invention is to provide such system in the form of a real-time Internet-based method of and system for controlling payment flows in a way that reduces payment πsk between financial market participants, both within a single domestic payment system and globally through a multi-currency implementation.

Another object of the present invention is to provide such a system as enables financial market participants to control such payment πsk on one another whether such πsk is propπetary to a counteφarty on a transaction or aπses as a result of financial intermediation in the payment process.

Another object of the present invention is to provide such a system as enables the control of payments πsk arising for a financial institution or an account holder withm a single currency, as well as cross-border payments πsk aπsmg from payments in a plurality of currencies.

A further object of the present mvention is to provide a computer-based payment πsk management system to enable control of payments πsk for all payment flows, whether arising from foreign exchange transactions or other payment types.

Another object of the present invention is to provide such a system as enables a participant to unilaterally control his πsk vis-a-vis a particular financial markets participant, without the necessity for agreement or cooperation of the other institution.

Another object of the present invention is to provide such a system as allows participants to more efficiently manage their current business, reduce overhead, improve returns on capital, and support new business with counteφarties by reducing payments πsk and enabling more efficient liquidity and credit πsk management.

Another object of the present invention is to provide such a computer-based system and software that can readily be used by all financial market participants, from money-center banks to coφorate end-users worldwide.

A further object of the present invention is to provide a computer-based payments πsk reduction system which does not require substantial change to the conventional market trading, confirmation, matching, cleaπng, instruction and reconciliation as developed to support financial market transactions and correspondent banking

A further object of the present invention is to enable each financial institution or coφorate hierarchy to determine the optimal allocation of system access, such that any individual branch, subsidiary, company or other legal or organizational entity can have separate access

A further object of the present invention is to provide a computer-based system in which separate accounts can be flexibly aggregated or disaggregated by participants for πsk management and reporting puφoses to promote effective oversight of group or individual participant use of the system A further object of the present invention is to provide a computer-based system m which separate financial market participants can be flexibly aggregated or disaggregated for πsk management puφoses and reporting puφoses according to participant assessment of πsk correlation between affiliated, connected, geographically co-located or similar financial market participants.

A further object of the present invention is to provide a computer-based system m which payment flows with a financial market participant or participants in a plurality of currencies and payment systems can be flexibly aggregated for πsk management puφoses and reporting puφoses.

A further object of the present invention is to provide a computer-based payments πsk reduction system that is consistent with and complementary to the existing network for inter-bank financial communications (S.W.I.F.T.), domestic payment messaging standards and the internet protocol networks increasingly used by financial institutions.

A further object of the present invention is to provide a computer-based payments πsk reduction system which does not require information details regarding the underlying transactions on which the system acts to reduce payments πsk.

A further object of the present invention is to provide a computer-based payments πsk reduction system which allows individual participants to determine unilaterally their tolerances for payment πsk according to financial market participant, currency and payment type.

A further object of the present invention is to provide such a system m which participants can view, enter and alter their πsk parameters for financial market participants, currencies and payment types on a real-time basis.

A further object of the present invention is to provide such a system m which the πsk parameters set by participants can be entered into the database of the system by way of screen-entry, batch-entry or integration with internal systems processes.

A further object of the present invention is to provide such a system in which payments πsk can be controlled in an automated manner through integration with the existing payments systems operating within payment banks directly connected to domestic payments systems.

A further object of the present invention is to provide such a system as enables payment banks to integrate the system host application in a modular fashion in connection with their participation in domestic payment systems with a high degree of openness, flexibility and interoperability

A further object of the present invention is to provide a quicker and easier means for momtoπng payment flows and reporting exception situations which may indicate a financial market participant's payment failure.

A further object of the present invention is to provide a computer-based system for a payment bank to notify account holders of payment problems lntra-day. enabling them to take such actions as will forestall and mitigate adverse impact on liquidity in that and other currencies. A further object of the present invention is to provide a quicker and easier means for mquiπes mto exception situations between and among participants and payment banks, facilitating earlier corrective action or remedial action as appropπate.

A further object of the present invention is to provide a computer-based system for account holders to notify payment banks in real-time of their wish to suspend any further payments identified financial market participants or mtermediaπes.

A further object of the present invention is to provide the computer-based system capability withm a payment bank to efficiently and effectively suspend any further payments to financial market participants or mtermediaπes on behalf of an account holder, following receipt of a request from an account holder to do so.

A further object of the present invention is to provide a computer-based system enabling automated calculation of global πsk positions based on payments activities in multiple payments systems.

A further object of the present invention is to provide a computer-based system which integrates the advantages of Web-based information management, browser interfaces, application-to-apphcation data interchange, object-oπented programming and open systems technologies to deliver improved flexibility, extensibility, modulaπty, interoperability and other information management advantages in connection with payments πsk management.

A further object of the present invention is to reduce or eliminate the systemic πsk that a payment failure by one financial market participant or intermediary may lead to failure of contingent payments down a chain of interrelated payments transactions, and thereby threaten the liquidity and integπty of payment and banking systems within a single market or globally.

A further object of the present invention is to provide such a system, in which a participant's payments liquidity is more optimally used to meet payment obligations in an automated manner.

A further object of the present invention is to provide such as system m which liquidity management software is employed to address cross-border payment πsk or payment πsk arising on the level of the individual account holder within a participating bank.

A further object of the present invention is to provide such a system in which payment instructions can be processed very rapidly after negotiation of the underlying transaction without compromising payments πsk mitigation.

A further object of the present invention is to provide such a system as enables access via a plurality of internet protocol networks and a plurality of computing devices, and flexibility in the use and configuration of access software to meet individual functional requirements and capacity to support technological integration.

A further object of the present invention is to provide such a system in which many-to-many data processing rationalizes the flows of information between host applications located anywhere around the globe (in both developed and emerging markets) without the prejudices and disadvantages aπsing from geographical dispersion.

A further object of the present invention is to provide such a system in which payment πsk parameters and other data entered into the system are automatically inteφreted by rule-based mteφretation procedures as to processing requirements.

A further object of the present invention is to provide such a system in which account holder payment parameters are managed on a database and communicated as operable parameters for payments processing by host applications in payment banks.

A further object of the present invention is to provide a system which uses or mteroperates with industry standard data formats for the capture and transmission of like data to enable efficient interface with pre-existing banking applications and systems.

A further object of the present invention is to provide a system which provides appropπate secuπty and integπty for the transmission of all data across its network via cryptographically secure sessions and digital certification of host application subscπbers.

A further object of the present invention is to enable payment πsk control against a financial market participant whether it is the ultimate beneficiary of a payment or an intermediary in the payment process acting on behalf of the beneficiary or other intermediaπes.

A further object of the present invention is to seπally assess a payment which will pass through one or more intermediaπes for compliance with πsk parameters set independently for intermediaπes and the ultimate payment beneficiary.

A further object of the present invention is to enable account holders to instruct the overπde of payment risk filters for particular payment transactions or payments to or through identified financial market participants or intermediaπes.

A further object of the present invention is to provide automated implementation of overπdes to enable payments to bypass payment πsk filters as instructed by an account holder

A further object of the present invention is to enable account holders to set πsk parameters which will take effect in default of specific instructions.

These and other objects of the present invention will become apparent hereinafter and in the Claims to Invention.

Summary of the Present Invention According to one aspect of the present invention, a Global Payments Management (GPM) system and method are provided for the puφose of tying together Third Parties, Users and Payment Banks sites (in the United States, Europe, Asia and other locations throughout the world) via a global communication network (e.g., interconnected internet protocol networks and a virtual pπvate network) to enable Third Parties and Users to communicate payments πsk controls and other instructions to Payment Banks making and receiving payments on their behalf, to facilitate real-time communications system-wide, and to provide more timely and better quality information on payments πsk management.

In order to support Third Parties, Users and Payment Banks located m different time zones, the GPM System preferably is available 24 hours a day and seven days a week. Such high availability allows Third Parties, Users and Payment Banks to participate m the system in a substantially equal manner, overcoming the disadvantages of remote location inherent in foreign exchange trading and settlement. The system takes advantage of advances in Internet Protocol (IP) networks, Web-based programming and electronic data interchange (EDI) techniques to ensure its compatibility with the plurality of existing operating systems, legacy software and participants' levels of technological sophistication. The system can be used by all market participants, large and small, who wish to reduce the payment risk exposures aπsing from their participation in foreign exchange markets and/or improve the πsk and liquidity management associated with their domestic and international payments generally.

"Third Parties" potentially include all financial and commercial entities involved in payment flows (for example, substantial wholesale payment flows m the FX markets) as account holders with a User bank or non-bank financial institution.

"Users" potentially include all banks and non-bank financial institutions instructing payment on their own behalf or as correspondent on behalf of Third Parties, and all financial and commercial entities as account holders in a domestic payment system. Third Parties in a cross-border context may simultaneously be Users in a domestic context.

"Payment Banks" potentially include all banks and non-bank financial institutions responsible for making payments on behalf of Users as part of the payment process m a payment-based transaction, and may be directly linked to a domestic payment system. Users may simultaneously be Payment Banks for one or more currencies.

"Counteφarties" potentially include all financial market participants who transact with Users and Third Parties to create payment obligations or serve as intermediaries in the payment process by holding accounts on behalf of payment beneficiaπes or their financial mtermediaπes. The GPM System of the present invention will enable Users and Third Parties to flexibly structure identification of Counteφarties to aggregate or disaggregate affiliates withm a coφorate group or branches of a financial institution, or to group Counteφarties with similar nationality or other risk factors

The GPM System of the illustrated embodiment supports the following functionalities Third Party and User host applications for screen, batch and automated entry of payment πsk parameters by currency, Counteφarty and payment type; a core system host application for automatic rule-based sorting of parameters according to Payment Bank acting on behalf of Users for payments in a particular currency and/or to a particular Counteφarty, communication of parameters to the Payment Bank host application controlling payment flows to the domestic payment system(s); automatic rule-based filteπng within the Payment Bank host application of payment messages agamst User-specified payments πsk parameters to ensure continuing compliance with parameters; real-time notification of exception conditions from the Payment Bank to the User (e.g., to indicate Counteφarty payment difficulties); realtime communications messaging between Third Parties, Users and Payment Banks to facilitate inquiry into and resolution of exception conditions; ability for Third Parties and Users to overπde the filter in the Payment Bank host application by transaction reference number or Counteφarty identification; ability for the Payment Bank to manually overπde the Payment Bank software to enable a payment to proceed notwithstanding non-compliance with parameters; ability for a User to instruct the Payment Bank to suspend any further payments to a particular Counteφarty; ability for Payment Bank host application to stop any further payments to any Counteφarty; ability to flexibly generate a vaπety of reports peπodically or on request according to the requirements of Third Parties, Users and Payment Banks; secure, reliable and encrypted communications; and accommodation of multiple Third Parties, multiple Users, and multiple Payment Banks at multiple geographical locations.

In accordance with the illustrative embodiment of the present invention, Third Parties have preexisting account relationships with Users such that Users transact payments in one or more currencies on their behalf. Users (who may act on behalf of Third Parties) are institutions possessing a Bank Identifier Code (BIC) as published by S.W.I.F.T., a universal standard identification method recognised by the ISO. The BIC is a unique address which, m telecommunication messages, identifies precisely the financial institution involved in financial transactions.

Users have pre-existing account relationships with Payment Banks such that Payment Banks transact payments on their behalf in one or more currencies. Banks or branches acting as Payment Banks for a User are identified by their BIC

The GPM System has five pπncipal component parts: a GPM Network, a Third Party Host Application, a User Host Application, a GPM Core System and a Payment Bank Host Application The GPM Network is a network of commercial and privately operated IP networks interlinked to the GPM Virtual Pπvate Network (GPM VPN) using routers. The GPM VPN, operating with controlled access, cryptography and firewalls, will ensure superior security, integπty and resiliency for the GPM System

The customer account structure withm the GPM System is deliberately flexible as to organization and number of customer accounts for any given coφorate entity or affiliated group Banks, for example, may choose to assign each branch dealing in the markets for its own account a separate User status withm the GPM System, or alternatively may wish to centralise control in a single branch through assigning other branches the status of Third Parties Coφorate treasuπes may similarly disaggregate coφorate divisions as Users with their own accounts, or aggregate them as Third Parties under a single User account. Regardless of account structure, the GPM System enables accounts to be linked together for reporting puφoses in flexible hierarchies of User and Third Party accounts, according to

er configuration a User may require Throughout the preferred embodiment of the GPM System, its software components are created using the Java™ programming language, its data format protocol expressed m the extensible Mark-up Language (XML), and its human-machine interfaces realized using Web (http) browser interfaces enabling human users to interact with the system. The Web-based architecture of the GPM system has significant advantages m terms of flexibility, openness, interoperability and maintenance, in particular enabling flexible publication of information and software upgrades, interoperability with a wide vaπety of pre-existing technology platforms, on-line application interaction and communications system-wide, and other processes related to Web-based and distributed computing

Preferably, network interconnection between Third Parties and Users will be jointly determinated. Third Parties communicate their πsk parameters and other payment-related information to Users. Only Users can pass πsk parameters or payments-related information through to Payment Banks, as only the account holder (the User) can properly instruct a bank (the Payment Bank) as to actions affecting an account.

The Third Party Host Application is realized as software provided to Third Parties as clients of Users at multiple sites located globally. The software components of the GPM system, including the Third Party Host Application, can be downloaded from a Website on the World Wide Web (WWW) or delivered on compact disk with or without payment of a fee. Vaπous instances of the Third Party Host Application may be available to cater for differences m language, financial markets activity, and relative technological and financial sophistication of the plurality of Third Parties. The Host Application enables a Third Party to request that a User bank generate processes m the GPM System reflecting the expressed preferences of the Third Party with respect to πsk management, messaging and reporting. Whether the User is required to implement these requests through the GPM System will be a matter for joint agreement between the User and the Third Party. Third Party access to Users and the GPM System may be through manual input, batch input or automated apphcation-to-apphcation data interchange Preferably, the Third Party Host Application also supports mquiπes, reports and messaging similar to the User Host Application.

The User Host Application is realized as software provided to Users of the GPM system at multiple sites located globally Vaπous instances of the User Host Application will be available, to cater for differences in language, financial markets activity, and relative technological and financial sophistication of the plurality of Users big and small At the simplest instance in the illustrated embodiment, a browser interface to the User Host Application will enable any small User with the capability of launching a commercially available browser to access, manually input to and use the GPM System. For those Users with moderate complexity (perhaps regular participants in the foreign exchange markets but not dealers themselves) an instance of the User Host Application will additionally provide facilities for file upload from commercially available spreadsheet programs using commercially available software for data translation At the most sophisticated level, for Users who are dealers in the foreign exchange markets or commercial or investment banks, the User Host Application can integrate with pre-existing transactions systems m the middle and back office using data mapping and electronic data interchange functionalities.

On a peπodic (usually daily) or real-time basis, the Users of the GPM System determine their tolerance for loss in respect of each counteφarty or intermediary m each currency as payment πsk parameters for GPM processing, either on their own account or on behalf of Third Parties. The basic parameter is preferably a clean payment limit (which may be set to zero). Users may also set default πsk parameters to control πsk in the absence of receipt of a peπodic instruction. Users may alter πsk parameters at any time. Preferably, GPM Users have the option of applying πsk parameters to Counteφarty payments according to message type, so that the GPM System can address payment πsk either for own account transfers (MT200) and commercial payments (MT202) in a cross-border context, and other categoπes of payments ansmg m domestic payment systems.

In the illustrative embodiment of the present invention, the Third Party and User Host Application access the system using commercially available Web browsers supporting extensible Markup Language (XML). The XML data protocol is extremely useful as it is capable of support for human- to-machme and machine-to-machine interactions. This provides tremendous flexibility for human interaction with the GPM System as the Third Party or User Host Application can therefore be accessed from any workstation or other device capable of launching a browser and accessing the installed software via telecommunications. This has advantages particularly for banks or companies with geographically dispersed operations, as vaπous offices can access a single instance of the Third Party or User Host Application installed at a central site. Alternatively, an executive travelling from his office may still be able to access the Third Party or User Host Application via telecommunications link mto the office's internal systems.

The "risk parameter" data files are transmitted to the GPM system via IP networks interlinked by routers to a GPM Virtual Pπvate Network (GPM VPN). The GPM/VPN provides improved facilities for ensuπng the secuπty, integπty and resiliency of the telecommunications network The network structure offers flexibility as well, as the GPM VPN can be interlinked via routers to commercially available internet networks (e.g., ATT, Spπnt, BTSyntegra, Equant, IBM), virtual pπvate networks owned by banks or consortia (e.g , VPNs operated by Reuters, Bloomberg, S W.I.F T ) and even the Internet

Once the GPM has received πsk parameters or other messages from a User, the GPM Core System stores the input in the Data Server and processes the input in the Process Server. Data changes and messages will be sorted according to recipient using rules-based processing acting on the data fields in the files and messages. New data files are generated containing πsk parameters for action by a single Payment Bank These files are then published to Payment Bank Host Application installed as a module at Payment Banks acting for the User Messages are sorted and routed to the appropπate recipient. Risk parameters are used by the Payment Bank Host Application in the Filter Process Module of the present invention. The Filter Process Module is designed to mteroperate with an existing liquidity/payments manager to filter payments flowing between the payment queue maintained on the bank's existing internal systems and the external domestic payment system(s) to ensure that all payments made on behalf of a User comply with the User's πsk parameters. The fundamental mechanism is the compaπson of the payment amount m a payment instruction against an available balance calculated for the recipient Counteφarty. Where the payment amount is within the available balance, the payment instruction is allowed to proceed. Where the payment amount is greater than the available balance, the payment instruction is rejected back to the payment queue for later reassessment. As payments from a Counteφarty are received, the available balance πses; as payments are made the available balance falls. The Filter Process Module acts as the shuttle on a loom, ensuπng payments flow back and forth between an account holder and any Counteφarty in balanced measure Users and Third Parties will be able to instruct overπdes to the Filter Process Module for specifically identified payment transactions or Counteφarties. The Payment Bank may overπde the πsk parameters with a manual instruction, m its discretion or at the request of a User. This feature may facilitate liquidity in a payment system, particularly one that is illiquid or highly concentrated, where failure by one bank m the system to make a payment impedes the ability of another bank in the system to make a contingent payment (i.e., a bottleneck).

The Payment Bank Host Application enables the Payment Bank to monitor the flows of payments to and from User accounts in respect of individual Counteφarties, allowing them to detect an imbalance which impedes further payments in accordance with User parameters. The GPM System enables the Payment Bank to notify a User in real-time should a sustained imbalance in payments received from a Counteφarty result in a failure to make payments to the Counteφarty. Such an event may indicate liquidity or payment difficulties at the Counteφarty, and would normally be the subject of inquiry by the User, and perhaps action to suspend further payments to the Counteφarty in that and other currencies, and to raise any consequent liquidity shortfall which might impact systemic payment flows.

The Filter Process Module of the present invention will have the important capability of automatically responding to a User or Third Party instruction to suspend all payments to a particular Counteφarty, stopping all further payments as they are submitted for checking duπng payments processing Alternatively, the Payment Bank may manually instruct the Filter Process Module via the Payment Bank Host Application to stop all further payments to a particular Counteφarty, where it deems such action appropπate (e.g., where it has been notified of an insolvency or operations failure). This mechanism provides a very significant improvement on the ability to intervene to stop payments m the event of a known insolvency or other condition of similar concern. The GPM System facilitates broad range of communications between participants in connection with payments management. Some inquiπes will be handled by the system on an automated basis. For example, Third Parties (via Users) and Users may request detailed or summary information about payment performance for Counteφarties or currencies. Third Party and User requests will be routed via the GPM Network to the Payment Bank(s) acting on their behalf to the Payment Bank Host Application. The Payment Bank Host Application has the capacity to automatically fulfill inquiry requirements according to data on the day's activities, and will then send the inquiry response back through the GPM Network to the initiating User or Third Party.

Real-time messaging will be available between all GPM System participants. A User who is alerted by a Payment Bank of a sustained payment failure may then make on-line inquiry to the Counteφarty, where the Counteφarty is also a User. The Counteφarty can then make inquiry to his own Payment Bank to request claπfication or resolution of the payments problem where it is not under his direct control.

Reports are available on a peπodic or on-demand basis for all GPM Network participants. All Third Party, User and Payment Bank Host Applications are capable of generating flexible, parameteπzed reports, according to the requirements of the request. Reports can contain data about Counteφarties, currencies, payment types, failed payments and metrics of payment πsk reduction calculated by the GPM Core System. The GPM Core System can also calculate performance metrics such as the efficiency of payments and liquidity management, and other relevant statistics.

Other advantages of the present invention will become apparent hereinafter.

Bπef Description Of the Drawings

For a more complete understanding of the Objects of the Invention, the following Detailed Descπption of the Illustrative Embodiments should be read in conjunction with the accompanying Drawings, wherein'

Fig 1 is a tabular schematic of the pπor art three-day process for gross (transaction by transaction) foreign exchange settlements.

Fig. 2 is a table listing the different types of risks ansmg in payments systems.

Fig. 3 is a schematic diagram of the network for communications in the GPM System of the present invention, shown realized as a plurahty of Third Party and User client workstations, applications interfaces and Web applications in operable communications with one another through a Web-enabled architecture, embracing both existing internet protocol networks widely in use in the financial markets and interlinked to a virtual pπvate network for communications between the GPM Core System and the Payment Bank Host Application installed withm Payment Bank systems; Fig 4 is a schematic diagram of the GPM Core System of the present invention, shown realized as a plurality of client-server workstations, the whole being connected by a plurality of internet protocol networks to the GPM Core System and by a virtual pπvate network (VPN) to Payment Banks;

Fig. 5 is a schematic of the digital certificate issuance and usage process;

Fig. 6 is a tabular schematic of the three-day process for foreign exchange settlements mcoφorating the Granular Payment Management processes;

Fig. 7 is a schematic diagram of the flow of πsk parameters, suspend instructions and messaging through the GPM System of the present invention;

Fig 8 is a schematic representation of the controlled and sequenced flows of payments between two Users via their Payment Banks;

Fig. 9A1 is a schematic representation of Risk Parameter Instruction Process m the GPM System of the present invention;

Fig 9A2 is a tabular schematic of a message format capable of instructing payment πsk parameters to a Payment Bank according to an illustrative embodiment of the present invention;

Fig. 9B is a listing of the Risk Parameters required for use in the Filter Process of the Payment Bank Host Application of the present invention;

Fig. 9C is a schematic representation of the modular nature of the Filter Process in the Payment Bank Host Application, acting as an adjunct to existing liquidity/payments management software operating withm banks directly interfacing to domestic payment systems;

Fig. 9D1 is a step-by-step textual descπption of the Filter Process of Fig. 9C according to an illustrative embodiment of the present invention;

Fig. 9D2 is a schematic representation of the Filter Process of Fig 9C according to an illustrative embodiment of the present invention;

Fig. 9E1 is a step-by-step textual descπption of the method for calculating the Available Balance parameter required for the Filter Process of Fig 9C according to an illustrative embodiment of the present invention,

Fig 9E2 is a schematic representation of the method for calculating the Available Balance parameter required for the Filter Process of Fig 9C according to an illustrative embodiment of the present invention;

Fig 9F1 is a schematic representation of the instruction and confirmation process involved in suspending payment according to the present invention.

Fig 9F2 is a tabular schematic of a message format capable of instructing suspension of payments in respect of a selected Counteφarty according to an illustrative embodiment of the present invention.

Fig. 9F3 is a step-by-step textual descπption of the method for suspending payments, as originated in the Third Party or User Host Application, processed through the GPM Core System, and implemented via the Filter Process in the Payment Bank Host Application according to an illustrative embodiment of the present invention; and

Fig. 10 is a graphical representation demonstrating the advantages of the present invention for reducing and controlling levels of payment πsk as between two counteφarties both using the GPM System of the present invention.

Descπption of Embodiments of the Present Invention

Referπng to the figures of Fig. 3 through 10 , embodiments of the present invention will be descπbed in detail below, wherein like elements and structures will be indicated using like reference numerals.

In general, the Granular Payments Management (GPM) system of the present invention may be realized in a vaπety of ways depending on the enabling technology available at the time of realization and particular application requirements at hand. In particular, it is expressly recognised that standards for data interchange are evolving and that industry standard data formats and messaging protocols may be subject to amendment.

As shown m Fig. 3, the GPM System of the illustrative embodiment is shown compπsing a Web-based network of client-server workstations on which Web-server and Web-lmked interface applications are supported, and Third Party, User and Payment Bank Host Applications, and spatially distπbuted about the planet Earth m order to provide real-time service to the diverse Third Parties. Users and Payment Banks that the system is designed to serve. It is understood, however, that the system can be realized in other ways.

As shown in Fig. 3, the GPM System involves a network of connected Third Party Host Applications, User Host Applications, Payment Bank Host Applications and the GPM Core System running on the Web-based client-server information network. The schematic for the illustrative embodiment demonstrates the flexibility of the network for interconnecting those involved in payment flows. Third Party (4) and User (1 ) access mechanisms include: a plurality of proprietary network access workstations, personal computers, internally networked clients accessing servers, apphcation-to- apphcation integration with back office transaction processing systems, and other arrangements promoting ease of access and flexible use.

The Third Party host application (4) will connect to a User host application ( 1 ) via network arrangements agreed between them and using internet protocol communications networks, whether pπvate, commercial or the Internet. The Third Party Host Application will be capable of automated interoperability with the User Host Application to set πsk management parameters for processing of payments on behalf of Third Parties where the User acts as correspondent, to generate suspend instructions when necessary, to generate overπdes as necessary, and to define requirements for messaging, inquiπes or reports via the GPM Network.

Users will be interconnected to the GPM Virtual Pπvate Network (GPM/VPN) (6.1) via routers (6.3) and a vaπety of internet protocol networks (6.2), likely to include the pπvate and commercial networks most widely used in the financial sector, but potentially including the Internet.

The VPN interconnects via a router (6.3) to the GPM Core System (2). It is expressly recognised that the VPN functionality may be alternatively realised by advances in network secuπty and autentication processes.

In the illustrative embodiment, the GPM Core System processes the data received from the plurality of Users into data to be published to the plurality of Payment Banks. The GPM Core System communicates via the VPN to the Payment Bank Host Application (3) installed as a modular component withm the payment systems of Payment Banks. The Payment Banks then further interface to the domestic payment system(s) for each currency (5) using the established present interfaces and networks.

An important feature of the present invention as depicted in the illustrative embodiment is the capability for many-to-many publishing of payments data from and to diverse data formats as used withm the heterogeneous plurality of Third Parties, Users and Payment Banks. The use of open software applications capable of integration with any computing platform, and extensible Mark-up Language (XML) as the data format protocol in the Third Party Host Application, User Host Application and Payment Bank Host Application, will promote the interoperability of the GPM System with legacy systems and applications withm Third Parties, Users and Payment Banks.

XML has several cπtical advantages. First, XML is both human-readable using browsers and XSL stylesheets, and machine-readable for apphcation-to-application automated processing. Second, it is an open standard capable of ready translation via data mapping into other existing data standards (including S W.I F T and other EDI standards) using commercially available translation methodologies. This will promote interoperability with existing πsk management, payment and other computerised and automated systems withm Third Parties, Users and Payment Banks. Third, commercially available software exists to map or translate data from and to XML for other data formats. This means that Users can store data in their internal systems in pre-existing formats, and still use the data to populate their GPM inputs without replication or πsk of inconsistency. Finally, XML is very flexible and extensible, allowing the creation of new data formats and data fields without impacting pre-existing applications and systems. This capacity can be used, for example, to expand the range and scope of the GPM System without impacting the interfaces with payments applications.

Human interaction with the GPM System will use browser interfaces. The use of a browser interface has significant advantages' it will be familiar to virtually all users of technology; it can be structured ith customised "drop-down" lists for populating data fields for easy "pick and click" selection of counteφarties. Third Parties. Users, Payment Banks, currencies and other categoπes of data; and it can accommodate free text messaging when appropπate. In particular, most recent instances of browsers are capable of supporting extensible Mark-up Language (XML), the data format protocol selected for the illustrative embodiment of the present invention, through the application of XSL stylesheets to the data. A further advantage of browser interface is that the User Host Application and Payment Bank Host Application can be installed with a coφorate information technology system, capable of remote access from a plurality of geographically dispersed sites. This will facilitate "passing the book" of payments πsk management between geographically dispersed branches and offices, where a Payment Bank or User wishes to actively manage and monitor payments activities worldwide.

As shown m Fig. 4, the GPM System of the illustrative embodiment comprises a plurality of access devices and applications for Users ( 1 ), providing and receiving data to and from the GPM Core System by way of a plurality of internet protocol networks (6.2), which are interconnected by way of routers (6.3) to the VPN (6.1 ) serving the GPM System. The VPN is then connected via router to the GPM Core System (2).

The GPM Core System in the illustrative embodiment compπses: a plurality of personal computers or servers (e.g.. IBM or similar) providing an Operations Workstation (2.1), Database Server (2.2), Authentication Server (2.3), Process Server (2.4) and Web Server (2.5), each interconnected to a Local Area Network (LAN) (2.6) A remote hot Backup System m the illustrative embodiment compπses a Backup Operations Workstation (2.7), Backup/Mirrored Database Server (2.8), Backup Process & Authentication Server (2.9) and Backup Web Server (2.10), each interconnected to a LAN (2.1 1). The GPM Core System and Backup System are via their respective LANs by bπdges (2.12), in a conventional manner The GPM Core System connects by way of the VPN (6.1) to the Payment Bank host applications (3) installed m the Payment Banks in the GPM System.

The User Host Application is optimally installed on a server withm the User's own internal back-office systems and accessed from a workstation, personal computer or network access device. The User Host Application will usually be located at the User site pπncipally associated with cleaπng and settlement of payments transactions, although it is understood that each instance of the User Host Application will promote flexibility in User access, and may be networked via internal User networks using conventional communication networking technology well known in the art.

In the illustrative embodiment, each instance of the User Host Application at the User site supports a browser interface. The particular character of the browser interface may vary from embodiment to embodiment of the invention to flexibly adapt to the User's requirements, complexity, vaπous instances of the User Host Application, and means of GPM Network access. However, it is preferred that each such browser interface supports an array of display screens using extensible Stylesheet Language (XSL) stylesheets which enables Hyper-Text Markup Language (HTML) representation of XML data and document type definitions (DTDs), and facilitates easy entry of information by the User duπng the day, as well as displaying vaπous types of reports and notifications produced by the GPM Core System (It is noted that the invention could be realized at the User site to support a graphical user interface (GUI) using a GUI generator In such a realization, the installation at the customer site would operate as a client on the server on which the User Host Application is installed )

The computers used to realize each instance of the User Host Application can run virtually any type of operating system, such as the Microsoft Windows NT operating system, Microsoft Windows 2000 operating system, earlier versions of the Microsoft Windows operating system, Unix operating system, or the Macintosh operating system, or operating systems now emerging to make better use of emerging technologies

Each User Host Application instance cooperates with central server processes operating on the GPM Core System Servers at the central site by way of the data-packet network communication protocol supported over the VPN, and interconnected internet protocol networks The User Host Application and GPM Core System will exchange data using an apphcation-to-application interface

In the illustrative embodiment, each instance of the Payment Bank Host Application installed on a server at the Payment Bank site supports a Filter Process Module which will interoperate m a modular manner with the pre-existing Liquidity/Payments Manager software already installed m the Payment Bank's legacy system for payments processing The particular character of the interface may vary from embodiment to embodiment of the Filter Process Module to flexibly adapt to the Payment Bank's existing systems and the interface requirements of the domestic payment system and/or multiple payment channels

Payment Banks will additionally have a browser interface to the Payment Bank Host Application for momtoπng payment flows, Third Party and User πsk parameters, inquiπes, messaging and reports This browser interface will also be used to instruct manual override to enable particular payments or to suspend payments to a particular Counteφarty where this is deemed appropriate in the Payment Bank's discretion The computers used to realize each instance of the Payment Bank Host Application can run virtually any type of operating system, as above lor the User Host Application The browser interface and data structure for the invention will support multiple languages and the global character set used commonly worldwide (It is noted that the apphcation-to-application interface could be realized as an application client on the client-server architecture ol the GPM Core System, and that the Payment Bank interface could be realized similarly with a GUI )

In the illustrative embodiment, the processes of the present invention m the GPM Core System are realized as client-server based processes wherem the Process Server supports the server portion of the process while a GPM Operations Workstation supports the client portion thereof In order to realize such client-server processes upon the GPM Core System a data-packet network communication protocol is employed The GPM Core System uses a suitable network communications product commercially av ilable from a v endor of lntormation bus technology (e g , Tibco IBM, etc ) The benefits of using a bus architecture include flexibility, extensibility, easier maintenance, improved secuπty and the reinforcement of design goals such as modulaπty, abstraction and encapsulation. The network communication may alternatively be supported by messaging middleware (e.g., MQ Seπes).

All information items pertaining to Third Parties, Users, Payment Banks and parameters for processing in the GPM System, inquiπes, messages and reporting, and the like are maintained withm a database maintained withm the GPM Database Server (7). In the preferred embodiment, this database is realized as a relational database using commercially available database management computer software (e.g., Oracle, IBM DB2).

In the illustrative embodiment, the virtual pπvate network (VPN) (4) provides appropπately high levels of security and integπty for all communications across the GPM network using commercially available technology for encryption, firewalls, anti-hacking measures, and assured message and data delivery.

As shown in Fig. 5, the GPM System of the illustrative embodiment will use a system of digital certification to ensure the secuπty of network access against use or infiltration by unauthoπsed persons. A digital certification process, commercially available from several digital certification authoπties, will be used to issue digital certificates to all remote host applications and to ensure their use whenever any remote host application accesses the GPM Core System at the initiation of a session. Participant authentication may alternatively be supported by vaπous secuπty technologies commercially available or under development.

In addition, all transmissions via the GPM Network will be digitally encrypted using secuπty technology suitable for high secuπty banking applications.

As shown in Fig. 6, the GPM System of the present invention will greatly alter the πsk profile attaching to foreign exchange settlements, but with relatively minor impact on conventional processes used by participants and their branches or correspondent banks (collectively "Payment Banks" for GPM).

Fig 6 descπbes the changes from the perspective of a foreign exchange market participant, but a similar impact would be observed for any financial market participant involved in regular flows of large value payments. On the Trade Date, the dealing, confirmation, matching and payment instructions continue as before. But following the generation of payment instructions, the GPM User Host Application will allow a User to construct a profile of their payment πsk in each currency vis-a-vis each Counteφarty Using this software and their own discretion regarding the tolerance of their institution for credit risk on each Counteφarty, the User can generate a file of payment nsk parameters to control the payment πsk by Counteφarty, currency and payment type The parameters for each Counteφarty will be set independently for each currency for which GPM operates The limits can be set differently for each currency, (e g . S100M in US dollar, as a very liquid currency, but only S 10M in Malaysian Ringgit, as a relatively illiquid currency). The parameters can also be set according to payment type in accordance with the definition of payment message types by S.W.I.F.T. and the vaπous alternative domestic payment systems or book transfer (payment channels).

On the Settlement Date, the Payment Bank constructs the payment queue of payment messages for that date. The GPM Filter Process Module is a modular software component acting in a complementary manner to existing liquidity and payment queue management software interfacing to the domestic payment system. As before, the Liquidity Payment Manager assesses whether sufficient liquidity exists in the clearing account with the domestic payment system to enable an outgoing payment. If the payment passes the Liquidity Payment Manager, then the payment is additionally submitted to the GPM Filter Process Module. This module assesses the payment message against the parameters set by a Third Party and or User for the Counteφarty(ιes) to see whether the parameters will be violated by the outgoing payment. The Filter Process will seπally assess compliance with πsk parameters for each Counteφarty detailed on a payment transaction as either payment beneficiary or payment intermediary. If no, then the payment is returned for processing to the interface with the domestic payment system as usual. If yes, then the payment is returned to the back of the payment queue for further assessment next time it comes up in the queue.

The GPM Filter Process Module will also assess whether a payment transaction, counteφarty or intermediary is the subject of an overπde instruction. In which case, the payment transaction will be allowed to proceed to the domestic payment system regardless of the πsk parameters. Payment Banks will generate S.W.I.F.T. MT900 and MT910 messages as before, where available. These messages and/or the data underlying their generation will be used to populate the metπcs controlling the assessment of payments agamst the Available Balance calculated in the Filter Process Module. In particular, the Payor designation, Payee designation and the amounts of debits and credits will be extracted from the messages as data fields and used to update the Available Balance metric for the relevant counteφarty and User/Third Party.

The Payment Bank Host Application will retain a cache of the identifiers (for example. Transaction Reference Numbers for S W.I.F T. payment transactions) of payment transactions rejected by the Filter Process Module. This cache will be available for inquiry or reporting to enable the Payment Bank or Users or Third Parties to assess the impact of the Filter Process Module on their outgoing payments traffic

The Payment Bank Host Application will be capable of issuing notifications as exceptions conditions arise. For example, where all payments to any Counteφarty are rejected for a half-hour peπod (or other appropriate timespan). a notification may be issued to both the Payment Bank and the Third Party and/or User to apprise them of the sustained failure. On receiving this alert via the GPM network, the Third Party and/or User can make appropπate inquiries immediately. Where no substantial problem exists with a counteφarty, a Third Party and/or User may instruct an overπde to Filter Process Module to enable payments to proceed on the basis of identified payment transactions, intermediaπes or counteφarties.

If the Third Party and/or User has cause for real concern, however, he can suspend further payments the counteφarty or intermediary via the GPM Network in one, some or all currencies. A mechanism for suspension of payments will result in the Filter Process Module rejecting any further payments for the counteφarty, and may be effected for all currencies for which the participant uses the GPM System in one simple and efficient instruction. The early detection of a counteφarty payment failure will also reduce the systemic impact of defaults by enabling a participant of the GPM System to calculate exactly his payment exposure to a counteφarty, and to fund more reliably any shortfall (necessarily limited to the Clean Payment Limit parameter) in liquidity which might affect his own ability to make contingent payments m affected currencies.

In some circumstances, a Third Party or User may wish to override the πsk parameters instructed to the Filter Process Module at their Payment Bank for particular, identifiable payment transactions or Counteφarties. Where an overπde instruction has been received, the Filter Process Module will permit a payment transaction to proceed regardless of whether it is withm the available balance maintained for the relevant Counteφarty.

An inquiry to determine the Available Balance for the Counteφarty at all Payment Banks will give the participant a precise measure of any payment exposure he has vis-a-vis the Counteφarty. Because the Available Balance is updated in real-time as payments are made, it provides very precise information on the Counteφarty exposure and liquidity impact of a default.

On a day-to-day basis the User can monitor his credit exposure across all currencies in respect of a particular Counteφarty both peπodically and on-demand in a much more efficient and reliable manner. The GPM System and User Host Application will enable flexible aggregation of payment flows to provide better information to support πsk management and trading decisions vis-a-vis counteφarties When combined with the limits on payment πsk operating in the GPM System, the effect should be to increase the global capacity for trading volumes by reducing the present credit constraints which aπse due to gross payment exposures.

There may be occasional situations in which a Payment Bank might wish to override the automated risk parameters of the Payment Bank Host Application to permit a payment to proceed, despite its non-compliance with πsk parameters set by the User In this event, an overπde facility is provided whereby the Payment Bank can permit indiv idual payments, or payments to particular Counteφarties, to proceed for payment despite the breach of πsk parameters

On the Reconciliation Date, the Users will use the MT950s generated as usual by Payment Banks for reconciliation in their existing processes, with no change to conventional practices. They can follow up on failed settlements of individual transactions accordingly, but the advantage of learning of the amounts of payments not received on the day previous should eliminate much of the stress and uncertainty attendant on the process using pπor art systems and techniques.

As shown in Fig. 7, the GPM System is backward compatible with existing messaging, payments and πsk management processes withm market participants and payment banks. The GPM System supplements the current infrastructure by providing a logical flow of information between account holders and payment banks to improve the functionality of payments control and also communications between banks and account holders. In the illustrated schematic, the User receives confirmation of market transactions (A) from the S.W.I.F.T. network. The transaction is matched (B), and the payment instructions are generated (C) and sent (D) via the S.W.I.F.T. network to the Payment Bank (E). At the Payment Bank, the payment instructions are lodged in a forward payment instructions cache (F) until the payment date. The User then forwards the information about payments exposures to his πsk management operations. The πsk management operations will determine appropπate levels of πsk exposure to the counteφarty according to tolerance for counteφarty credit πsk, currency liquidity πsk and other measures (G). The resulting πsk parameters are entered (H) in the module for generating πsk parameters and suspend instructions in the User Host Application (1.1). The User Host Application communicates these πsk parameters to the GPM Core System (I), which applies rules-based processing (J) and data storage, and forwards the πsk parameters (K) to the Filter Process Module in the Payment Bank Host Application via apphcation-to-application data interchange.

On the payment date, a queue of all pending payments messages is constructed from the stored payment mstructιons(L) As payments operations commence, each payment message is forwarded to the payments or liquidity management software controlling payments sent to the domestic payment system (M) If the payment fails the parameters in this process, it is returned to the queue (N). If it passes, then it is forwarded to the Filter Process Module cooperating with the existing payments or liquidity management software (O). The Filter Process Module assesses the payment against the πsk parameters for the Counteφarty(ιes) (P). If it fails, the payment message is returned to the payments queue and details of the transaction are cached for reporting and reference (Q). If it passes, details of the transaction are cached and the payment message is forwarded (R) to the domestic payment system for payment (S).

Data regarding incoming payments are captured to populate the Available Balance metπcs essential to the Filter Process Module (T).

Notifications, messages, inquiπes and reports can flow between the User and the Payment Bank via the GPM System in an automated or on-demand basis. In the illustration, the Payment Bank may generate a notification (U) which is sent (V) via the Core System messaging facility (W) and relayed (X) to the User Host Application for notification (Y) of the User All message traffic is stored for audit puφoses (Z) As shown in Fig. 8, the GPM System of the present mvention enables payments to be randomly sequenced as between two financial market participants so that no great imbalance in credit exposure occurs between them. Payments are released by the Filter Process Module up to the Clean Payment Limit, as determined by the Third Party or User. Following that, further payments to the same counteφarty will be filtered and returned to the payments queue, unless permitted by overπde. Only when receipts of expected payments from the Counteφarty are credited to the User's account (designating either the User or a Third Party as recipient) will further payments be released. In this manner, the Filter Process Module ensures the regularity and moderation of payment flows between two parties.

Only one party needs to be a User or Third Party for the GPM System to prove effective. The ability to control πsk without the express agreement or cooperation of a counteφarty is a significant innovation.

As shown in Fig. 9A1 , the Third Parties and Users accessing the GPM System will generate and send instructions (A and B) to their Payment Banks (branches and banks making payments on their behalf into domestic payment systems) to control the payments agamst πsk parameters. Separate instructions will be generated for each Counteφarty m each currency. Currencies will be identified by ISO codes. These πsk parameters are designed to control the level of payment risk and liquidity πsk ansmg m connection with a Counteφarty. The Third Party Host Application (4) will be capable of generating risk parameters, but will not have direct access to the GPM System. The Third Party must therefore forward its πsk parameters to a User acting on his behalf (A). The User Host Application (1) can generate risk parameters on behalf of the User and Third Parties, and send these, as well as relaying any Third Party nsk parameters, to the GPM Core System (B). The GPM Core System (2) will analyse and sort received data files using rules-based processing. Data will be stored, and also forwarded to designated recipients. Risk parameters will be forwarded to the Payment Banks (C) designated as making payments on behalf of Users and Third Parties. The Payment Bank Host Application (3) will store received πsk parameters and apply them during the Filter Process (D). Only payment instructions passing the parameters in the Filter Process will be forwarded to the Domestic Payment System (5) for payment (E)

As shown in Fig. 9A2, is an example of the data fields the risk parameter instruction generated by the Third Party or User Host Application might contain, using industry standard formats and showing a vaπety of data relevant to the routing and application of the πsk parameters. The data format fields follow content standards defined by S W.I F T. for payment messages, and so will be backward compatible with existing payment processmg systems and industry conventions. Although the data is presented here in the format of an industry standard message, the data the Third Party or User Host Application will be generated using a flexible browser interface, allowing easy and transparent selection of counteφarties, intermediaries, currencies, payment types and may use different data format elements or standards. It will be captured in the format of an XML document type definition (DTD) suitable for the structure of data, and in particular the need for flexibility in the characteπsation of counteφarties. The representation here indicates that there can be multiple counteφarties or intermediaπes designated as subject to a single risk parameter. This will be particularly useful for aggregating affiliated branches or coφorate entities which are likely to be mutually implicated in a default or insolvency. In this manner, a User or Third Party can control πsk in a manner tailored to his perception of correlation among affiliated or similar trading entities. The representation also permits multiple categoπes of Payment Type, recognizing that Users or Third Parties may wish to be selective in applying GPM processing to particular categoπes or sizes of payments or alternative payment channels.

Fig. 9B provides examples of the Risk Parameters utilized by the Filter Process. Note that the Risk Parameters may be quite simple, including for each currency independently of the Counteφarty (however designated or aggregated), the Clean Payment Limit, and designation of Payment Types These three parameters are sufficient to enable the Filter Process to control the payment πsk and liquidity πsk ansmg in connection with the Counteφarty for all payments of the designated types. Note that these Risk Parameters are provided as examples. Other parameter may be used to generate a πsk profile that accurately correlates πsk of releasing payment to the payment beneficiary for a given payment.

Fig. 9C illustrated as exemplary embodiment of the Filter Process Module of the Payment Bank Host Application. The Filter Process Module is intended to co-operate and be backward compatible with the existing liquidity and/or payments management software controlling the outflow of payments instructions to the domestic payment system. Such software may either be developed bespoke by a bank or provided by a software vendor. Liquidity Payment Managers are software typically designed to evaluate individual payments messages against (a) the available balance overall for the bank m the domestic payment cleaπng account (generally an account held at the central bank for a real-time gross payment system), and (b) the available balance in the account of the account holder referenced in the payment instruction (the account to which a debit will be made for the payment) If a payment instruction fails either check, it is rejected back to the payments queue for re-evaluation later Where a payment instruction clears these two parameterized evaluations, and any other filters a bank or domestic payment system or local law or custom may impose, it is forwarded for payment through the gateway to the domestic payment system.

The Filter Process Module in the Payment Bank Host Application will be a modular extension of the parameteπzed evaluation already operating in the Liquidity/Payments Manager Using an apphcation-to-apphcation interface which translates the data formats of the liquidity/payments manager to the data formats of the Filter Process Module, and back again, the two application modules can intemperate without retooling of the existing application. Payments clearing the assessments of the legacy Liquidity/Payments Manager will be forwarded to the Filter Process Module for assessment If they fail such assessment, they are returned to the queue as before. If they pass, they are forwarded to the gateway to the domestic payment system as before. This modular integration with existing systems offers backward compatibility, providing lower integration costs and widespread adaptability of the GPM process

As shown in Fig. 9D1 and 9D2, the Filter Process Module of Fig. 9C operates a logical algoπthm for assessment of payments instructions. The process assumes that a payment instruction has been transmitted from the Liquidity Payments Manager application withm the Payment Bank's systems to the Filter Process Module for evaluation. As shown in Fig 9D1 , Step A of the Filter Process identifies the Payor on the payment instruction message. This will be possible using industry standard fields (e.g., Bank Identifier Code or similar domestic field tag)

Step B of the Filter Process involves assessing whether the Payor is a User or Third Party using the GPM System. If NO, then the payment instruction is passed back to the liquidity/payment manager for transmission to the domestic payment system interface without further evaluation. If YES, then the Filter Process Module proceeds to Step C, identifying the payment beneficiary and intermediaπes on the payment message. Intermedianes will be financial institutions handling the payment in the chain of accounts leading to the beneficiary, as identified on payment messages using standard industry formats.

Step D of the Filter Process involves assessing whether the payment beneficiary and any intermediaπes are designated Counteφarties of the User or Third Party. The record of Counteφarties is maintained for each User and Third Party withm the Payment Bank Host Application. If the neither the payment beneficiary nor any intermediary is a Counteφarty for granular payments management, the payment instruction is passed back to the liquidity/payments manager for processing to the domestic payment system If the payment beneficiary or any intermediary is a Counteφarty as defined m the πsk parameters, then the Filter Process Module goes to Step El and E2 for each Counteφarty to determine whether an overπde instruction has been received for a particular transaction or Counteφarty (step El ) and whether the counteφarty or intermediary is suspended from further payments (step E2)

In Step El , the Filter Process assesses whether an override instruction has been received for a particular transaction or Counteφarty. Preferably, the Filter Process looks to the Transaction Reference Number (Field 20 m S W I FT format messages) of the payment instruction under analysis and assesses whether an override instruction for that Transaction Reference Number is stored in a database of received overπde instructions. If not, it looks to the Counteφarty identifiers of the payment instruction and assesses hether an override for these institutions is stored in a database of received override instructions Where an overπde has been instructed, the Filter Process enables payment through the domestic payment system and updates the Available Balance by subtracting the payment amount Preferably, an overπde instruction for one Counteφarty on a payment message referencing more than one Counteφarty will pass the Filter for the ov erride Counteφarty, but the Filter will still operate to check πsk parameters in respect of all other Counteφarties referenced as payment beneficiary or intermedianes. If an overπde has not been instructed the operation continues to step E2.

In step E2, the Filter Process assesses whether any Counteφarty has been suspended. If so, all payments messages referencing the suspended Counteφarty will be rejected back to the payments queue until such time as the suspension may be lifted, otherwise operation continues to step F.

At Step F, the Filter Process Module identifies the payment type of the payment message under analysis and proceeds to step G to determine whether the identified payment type has been designated (in received πsk parameter instructions) for processing by the Filter Process Module The default operation will be to subject all payment types to the Filter Process unless only specific payment types have been designated (in received πsk parameter instructions) for processing by the Filter Process Module. Payment Type eligibility could be parameteπsed to assess a number of alternative payment charactenstics, including but not limited to the minimum value of payments for filteπng (e.g., $250,000 or more), whether a payment is intermediated (e.g., filteπng on whether the Counteφarty is a beneficiary or intermediary), and other factors. If the payment is of a type which makes it eligible for filteπng, the processing continues to step H, otherwise the payment message is passed back to the liquidity/payment software for further processing to the payment system.

This step can also be used to differentiate payment channels where there are more than one domestic payment systems. For example, the United States has two large value payments systems: Fedwire operated by the Federal Reserve System, and the Cleaπng House Interbank Payment System (CHIPS), operated cooperatively by the New York Cleaπng House Association. The payment type identifier in the πsk parameters can be structured to reference the vaπous payment, so that, for example, payment instructions for Fedwire would be subjected to the Filter Process but payment instructions for CHIPS would not. (Where separate liquidity/payments managers operate for separate payment channels, the Filter Process Module could be installed in multiple instances withm the Payment Bank, achieving the same objective

In step H, the Filter Process identifies the payment amount from the payment instruction (e.g , Field 32A on a S.W.I.F.T. message type).

Step I of the Filter Process Module involves calculating the Available Balance for the counteφarty. This involves a process explained fully below

Step J of the Filter Process Module involves compaπng the Available Balance against the payment amount Where the Available Balance exceeds the payment amount, the payment instruction is passed back to the liquidity/payments manager for further processing Where the payment amount exceeds the Available Balance, the instruction is rejected back to the payments queue, and the liquidity/payments manager notified accordingly

Finally, at Step K of the Filter Process, the Available Balance is reduced by the amount of any payment and stored. Whether a payment message is passed or failed, the Filter Process Module records the details of the transaction for audit and data cache puφoses. This information may be used to populate reports about successful and failed payments.

As shown in Fig. 9E1 and Fig. 9E2, the Available Balance used m the Filter Process Module of Figs. 9D1 and 9D2 is preferably calculated using a logical algoπthm with seven steps. Step 1.1 is to identify the User or Third Party (as done m Step A of the Filter Process). Step 1.2 is to identify the Counteφarty (as done in Step B of the Filter Process). Step 1.3 is to identify the stored Available Balance. This amount will be either (a) the Clean Payment Limit at the beginning of payments processing for the day, (b) the stored Available Balance as revised duπng Step K of the Filter Process, or (c) the stored Available Balance as revised by receipt of amended Risk Parameters specifying a change to the Clean Payment Limit.

At Step 1.4, the process for calculating the Available Balance sends a timestamped inquiry to the payments/liquidity manager or other appropπate application to determine whether incoming payments have been received designating the User or Third Party under consideration as a beneficiary since the last timestamped request. If so, the amounts of any such payments are totaled (Step 1.5) and added to the Available Balance (Step 1.6). The recalculated Available Balance is stored and forwarded (Step 1.7) to the Filter Process in fulfillment of Step I of that process.

As shown in Fig. 9F1, the same process used for generating and sending πsk parameters can also be used to generate and send instructions to suspend all payments to a particular Counteφarty or intermediary. The GPM System will enable a User (or Third Party via a User) to suspend all further payments to a designated Counteφarty or intermediary in one. several or all currencies with an instantaneous instruction. The Third Party (4) or User Host Application (1) initiates the process of suspension. Using the browser interface to the host application, the User or Third Party selects the Counteφarty (from a drop down list), selects the currencies for which suspension is sought (from a drop down list) and then clicks on a button generate a Suspend Instruction. The application will ask the User or Third Party to confirm the instruction according to its terms as a precaution appropπate to so serious an intervention in the payments process. Where the Suspend Instruction is confirmed, it is sent via the GPM Network to the GPM Core System (Step A on Fig. 9F1 )

The GPM Core System identifies Payment Banks for receipt of the Suspend Instruction acting for the User m the affected currencies. The Core System then routes the Suspend Instruction via the GPM Network to the Payment Bank Host Application (3) (Step B on Fig. 9F1). The Payment Bank Host Application sets the trigger in the Filter Process to determine that the Counteφarty has been suspended (Step C on Fig. 9F1). When a payment instruction for the Counteφarty comes through the Filter Process, it will be rejected and returned to the payments queue (Step E on Fig. 9D1 and Fig. 9D2). As a result, no payments for that Counteφarty as beneficiary or intermediary will be permitted until the trigger is reset to remove the suspension (in the event the Counteφarty is reinstated). Once the trigger in the Filter Process has been set to Suspended for a Counteφarty, the Payment Bank Host Application generates an automated notification to confirm implementation of the Suspend Instruction (Step D on Fig. 9F1). The notification is passed through the GPM Core System back to the User (Step E) and Third Party, if any (Step F), where the confirmation of the Suspend Instruction is notified as an alert and stored.

The process of the present invention descπbed heremabove represents a very important advance in the control of payments πsk duπng a default cπsis. In many countries, the legal system applying in bankruptcy allows for the unwinding of payments which are made after an insolvency petition is filed or, in some countries, all payments occumng on the date of an insolvency from midnight onwards As a result, the unwinding process can result m great dislocation to payments systems, resulting m unquantifiable payments πsk, liquidity πsk and systemic πsk. The earlier a party to a transaction can intervene to prevent further payments, the better. The GPM System presents a significant innovation m enabling a participant to suspend payments in all currencies for a counteφarty from the moment he first leams of a default or insolvency situation, while at the same time allowing the participant to know exactly the extent of his payment πsk and liquidity πsk in each currency (the Clean Payment Limit).

The Suspend Instruction will remain a bar to all further payments m the Filter Process until processing is reinstated. Reinstatement is achieved by the simple mechanism of sending a new Risk Parameter Instruction referencing the suspended Counteφarty. When received by the Filter Process, the suspension trigger is reset and the new πsk parameters are implemented in Filter Process logic.

As shown in Fig 9F2, an exemplary Suspension Instruction message includes fields that identify the Third Party and or User oπgmatmg the Suspend Instruction, the Payment Bank addressed by the Suspend Instruction, the Counteφarty suspended, and the nature of the instruction as a Suspend Instruction

As shown in Fig. 9F3, the steps alluded to in Fig. 9F1 can be detailed withm the process for the Third Party or User Host Application, the GPM Core System and the Payment Bank Host Application Together, the processes provide an effective and secure means of rapidly suspending payments to a Counteφarty where there are reasonable grounds for fearing that the Counteφarty is insolvent or otherwise incapable of performing his obligations.

Method Of Using The GPM System Of The Present Invention

Having descπbed the illustrative embodiment of the GPM System hereof, it is appropπate at this juncture to descπbe a preferred method of using the same

Opening an Account with GPM

Each entity invol ed in the GPM System, whether User, Third Party, Payment Bank or Counteφarty w ill ha e a Unique Identifier (UID). For Payment Banks and many Users, this will be their BIC code. Other Users and Third Parties may have a unique industry standard identifier of another sort, which can be used by the GPM System. Otherwise, the GPM System will issue its own unique identifier in a format analogous to the BIC code. The unique identifier will enable the GPM System to track an entity's involvement m the system, regardless of the nature of its role in any particular system action.

Users

Each User will have at least one account withm the GPM System. Each account can support one or more User or Third Party identities, or a combination thereof. Users may flexibly identify themselves, affiliates or others as Users or Third Parties such that various hierarchies of coφorate affiliates, branches, clients and other sub-groupings are separately accounted for withm the GPM System. Users may reflect their organizational and administrative hierarchy by identifying Users or Third Parties as they choose, including providing client identifiers used in their internal systems, and may create vaπous account hierarchies for aggregation or disaggregation of πsk management and reporting.

In the illustrative embodiment. Users will seek to open an account on-line via a Website maintained on the World Wide Web or other Web(s) by the GPM System. If accepted on review, the GPM System will automatically issue account identifiers to Users as accounts are opened in the system. GPM operations personnel shall issue, modify and manage customer account creation, deletion and secuπty features, including user logins, passwords, and authoπsation veπfication procedures in connection with access pπvileges for each employee with a User.

In addition, the GPM System will make use of global digital certification. Each User will require issuance of a digital certificate as part of the User acceptance process. Each session with the GPM System thereafter ill begin with veπfication of the digital certificate details with the digital certification authoπty

The GPM System will identify each User or Third Party account separately, but many Users may wish to aggregate an account hierarchy to promote more efficient liquidity and/or πsk management in connection with their payments activities Users may elect to create one or more "synthetic" accounts representing an aggregation of User and/or Third Party accounts By way of example, a foreign exchange dealer may wish to create individual Third Party accounts for each client for which the dealer acts in negotiation and settlement of foreign exchange transactions However, in order to manage his liquidity and payments risk across the range of client accounts, he may elect to aggregate the accounts into a single master account

User details necessary for the management and billing will be stored on the GPM Data Serv er. These details w ill include, but are not limited to account name, company name, contact name, address, telephone number, facsimile number, e-mail address, account number, billing information, and communication information.

All User access will be protected through a User-based access/entitlement secuπty mechanism including digital certification. Only properly authoπsed Users will have the ability to instigate GPM System actions, including creating and modifying Third Party, User and counteφarty details, enteπng or modifying Net Payment Limits, enteπng or modifying Risk Parameters, instructing Suspend Instructions for suspension of further payments, and creating or alteπng report formats, or generate messaging, inquiπes, and other system actions.

On an ongoing basis, the GPM System maintains records of User access and usage of the GPM System, and Users will have access to these records by way of inquiry and report facilities.

Payment Banks

Each Payment Bank will have at least one account withm the GPM System. A Payment Bank account will be identified by its BIC code, although the same entity may have other accounts as a User. Banks may have multiple accounts as Payment Banks so long as each is associated with a different BIC code (e.g., where the bank has branches participating m different domestic payment systems worldwide).

GPM operations personnel shall issue, modify and manage Payment Bank account creation, deletion and secuπty features, including user logins, passwords, and authoπsation veπfication procedures in connection with access pπvileges for each employee withm a Payment Bank.

Payment Bank connection to the GPM System will also make use of global digital certification. Each Payment Bank will require issuance of a digital certificate as part of the acceptance process. Each session with the GPM System thereafter will begin with veπfication of the digital certificate details with the digital certification authoπty.

Payment Bank details necessary for the management and billing will be stored on the GPM Data Server. These details will include, but are not limited to account name, company name, contact name, address, telephone number, facsimile number, e-mail address, account number, billing information, and communication information

All Payment Bank access will be protected through a Payment Bank-based access/entitlement secuπty mechanism including digital certification. Only properly authorised Payment Bank employees will have the ability to instigate GPM System actions, including management of User relationships, creating or altering report formats, and generating notifications, messaging, inquiries, and other system actions.

On an ongoing basis, the GPM System maintains records of Payment Bank access and usage of the GPM System, and Payment Banks will have access to these records by way of inquiry and report facilities Creating Counterparty Risk Parameters Withm the GPM System

Counteφarties can be any entity with whom the User or Third Party has regular payments flows. Where a counteφarty is not itself a participant in the GPM System, the counteφarty will nonetheless be identified to the system by its BIC or UID

The definition of counteφarties will be an important element in πsk control, as affiliated entities might be aggregated as a single counteφarty for πsk management puφoses, even where each entity trades for its own account (e.g., geographically diverse branches of a single bank). The User will be able to define a counteφarty for its own puφoses as an aggregation of UIDs and or BICs

The GPM System of the illustrative embodiment facilitates flexibility in creating and modifying counteφarty risk parameters for use in the GPM System Where a User elects human interaction, he can manually enter Risk Parameters via a browser interface to the User Host Application. Alternatively, he may translate a spreadsheet file into a file consistent with User Host Application formatting requirements. For fully automated processing, the User may have an apphcation-to-apphcation interface which automatically generates counteφarty πsk parameters for the GPM System from data and processes in his internal back-office systems.

Where a User is setting counteφarty πsk parameters manually, they would select a counteφarty from a drop-down list on the screen (with an option to add a new counteφarty). On the next screen they would be presented with a table of currencies (with an option to add or delete particular currencies) and spaces for Clean Payment Limit.

The User can set counteφarty parameters either by sending an individual instruction for a counteφarty on-line, or by way of file upload at any time duπng a session

Instances of the User Host Application for apphcation-to-apphcation interface may include a peπodic automated initiation of connection to the GPM Core System with fully automated upload of data files for πsk parameters.

GPM Filter Process Module Processing

The GPM System stores received data and messages from Users m the GPM Core System Data Server The data and messages are validated for syntax and field validation. The Process Server then analyses the data, sorting counteφarty instructions in the first instance according to the BIC of the Payment Bank. The data is then compiled for transmission to the Payment Bank Host Application.

The Payment Bank Host Application is configured to accept counteφarty nsk parameters as parameters for rule-based decisions in the Filter Process Module on whether to permit individual payments messages to proceed for payment to the domestic payment system or return the payment message back to the payment queue held on the Payment Bank's internal systems Where a payment complies with πsk parameters, it will be allowed to proceed for payment. Where a payment would breach the parameters, it is returned to the payment queue for later reassessment.

The Filter Process Module is acting in real-time to control User πsk vis-a-vis the counteφarty. It does this by using the data captured from incoming payments from the counteφarty and outgoing payments to the counteφarty to update the Available Balance calculated within the Filter Process Module about payment flows. Payments from a Counteφarty (e.g., reflected in the generation of an MT 910) add to the Available Balance for outgoing payments. Outgoing payments (e.g., reflected in the generation of an MT 900) detract from the Available Balance. Because the payments messages use standard data formats and identifiers for banks and account holders, these data fields can be captured and mteφreted consistently to populate the calculations in the Filter Process Module in conformity with a large number of domestic payment systems.

In the event that there are multiple Counteφarties of a User for a given payment, preferably the Filter Process Module iteratively evaluates the given payment for compliance with the πsk parameters applicable to each Counteφarty as descπbed above.

The Payment Bank Host Application will maintain a log of payments activities. This will enable flexible compilation of reports on either a peπodic or on-demand basis. At the end of the day, summary information about the day's activities will be transmitted to the GPM Core System as part of the log-off process.

Exceptions Processing

Where the Payments Bank Host Application has rejected payments to a particular counteφarty for some pre-defined peπod of time (e.g., half-hour), it will automatically generate a notification to alert the Payment Bank and the User to the potential problem. Either or both may then request a report of payments activities concerning the counteφarty be generated by the Payment Bank Host Application.

All payments messages, whether successful or rejected, will be cached to support inquiπes about the nature and amount of rejected payments.

Very often a User will want to initiate inquiries with a counteφarty who has failed to make timely payment as expected. If the counteφarty is also a User or Third Party withm the GPM System, the User receiving an exception notification can initiate an inquiry through on-line messaging to the User or Third Party. (Third Party messaging will be routed through the Third Party's designated User.)

Overriding Payments Filter

There may be instances where a Payment Bank will wish to override the Payments Bank Host Application to enable a payment to proceed to the domestic payment system despite its failure to pass all πsk parameters. If so, the Payment Bank will access the Payment Bank Host Application via a browser interface. It will identify the payment it wishes to act on from the log of rejected payments. It can then instruct the Filter Process Module to overπde the parameters for that payment the next time it is processed, enabling the payment to go forward to the domestic payment system.

Users and Third Parties will be able to instruct overnde of the Filter Process for individually specified payments, as identified by the Transaction Reference Number, or payments going to particular counteφarties or intermediaπes. The User or Third Party will access the appropπate host application via a browser interface They will identify the payment for overπde, or the counteφarty or intermediary, and send the instruction for overnde to the Payment Bank(s) Filter Process Module via the Core System

Suspending a Counteφartv

If on investigation the Third Party or User is inclined to believe that a counteφarty is in difficulty and at πsk of default, or indeed is subject to an insolvency action, the Third Party or User may wish to suspend further payments in order to reduce any credit exposure to the counteφarty. To do this the Third Party or User will access the browser interface for the Third Party or User Host Application, bπng up the counteφarty from a drop down list, and click on a button for "suspend payments". This button will lead to a screen displaying all the currencies dealt with for that counteφarty. The Third Party or User then has the option of selecting individual currencies or pressing a button for "select all". Once the currencies are selected according to the User's discretion, he will click a button labeled "send Suspend Instruction". He will be asked to confirm whether he really wants to suspend further payments to the counteφarty, with a yes or no option. If he clicks the "yes" button, the instruction to suspend payments will be sent to all Payment Banks acting for the User.

When the Payment Bank Host Application receives a Suspend Instruction referencing a counteφarty, the Filter Process Module will automatically engage a trigger to reject further payments messages, regardless of compliance with risk parameters The Payment Bank Host Application will generate a notification to the Payment Bank of the implementation of a Suspend Instruction The Payment Bank still has the discretion to overnde the Payment Bank Host Application to release individual payments should it determine to do so despite the effectiveness of the Suspend Instruction

Inquiries. Reports and Messaging

Risk reduction and control are enhanced in the GPM System by the provision of flexible realtime and periodic mechanisms for inquiries, reports and messaging. Any participant in the GPM System (Third Party. User or Payment Bank) will be able to send messages to any other participant in real-time, using standard e-mail capabilities integrated into the GPM System. Inquiπes can be structured as automated processes where the data sought by a User or Payment Bank can be obtained in an automated manner from the Payment Bank Host Application Reports to participants on GPM System usage will be generated on an on-demand and periodic basis covering a v aπety of parameteπsed matters These are likely to include: counteφarty gross payments total, counteφarty πsk parameters, GPM nsk reduction metrics, liquidity and efficiency of payments metπcs, and other matters determined by the participants to be of interest. A peπodic report of failed payment transactions will be generated a some prespecified time pπor to the close of each domestic payment system, and will detail at this time the payment transactions which have failed the Filter Process and remain on the payments queue withm the Payment Bank This will provide an opportunity to identify potential problems and their specific consequences, and to instruct overπdes as appropπate to prevent undesirable payment failures. Participants will be able to structure reports to aggregate a vaπety of User accounts. Third Party accounts and counteφarties, as required to form a consolidated view for their own πsk management and regulatory reporting needs.

Audit Trail

The GPM System will maintain a comprehensive audit trail withm the GPM Core System Data Server of all system actions such that all actions can be reviewed for audit, regulatory and recovery puφoses. The GPM Operations Workstation will be able to access the audit trail via the operator's browser interface to the system.

Advantages of the Present Invention

As shown m the graph of Fig. 10, the GPM System of the present invention provides simple and effective risk reduction with great advantages over all pnor art systems hitherto known. The accompanying graph is an illustrative example of the effect of πsk management as between two market counteφarty Users of the GPM System of the present invention (although only one needs to use GPM for it to be effective). In this example, Party A and Party B have entered into a plurality of transactions throughout a trading day resulting in a portfolio of trades The graph shows the gross amounts which must be paid in settlement of these trades such that Party A must pay S55M worth of US dollars and S45M worth of Euro at market prices. Party B must pay S55M of Euro and $45M worth of US dollars to settle its gross obligations under the same portfolio of transactions (All amounts are measured in US dollars for convenience of reference.) As a result, each party must pay the gross amount of $1 10M In the current system, payments to this amount would be made without any assurance of receiving the counteφayments of SI 10M value expected from the counteφarty to the transactions. As a result, each party would undertake payment risk and liquidity πsk of S I 10M on the other for that day's settlements

Under the GPM System of the present invention, however, each party sets his own Clean Payment Limit for each currency. In this example. Party A has set the Clean Payment Limit in US dollars at S 10M, while Party B has set it lower at S3M. Party B's πsk on Party A is therefore lower than Party A's risk on Party B. consistent with individual πsk assessment and the extent of the payment obligations In Euro, Party B has set his Clean Payment Limit at S 10M, consistent with his net payment obligation, and Party A has set his Clean Payment Limit at S2M, perhaps reflecting the greater difficulty of financing liquidity in Euro rather than a poor assessment of Party B's credit. The total payment πsk for each party is reduced to their net payment obligation in the sold currency and the Clean Payment Limit in the bought currency. (The real measure may well be substantially less if the amount of the Net Payment Limit has been offset by receipts of payments in other payment systems in earlier time zones pπor to a default.) In the illustrated example, the gross payment πsk of $1 10M has been reduced to S12M for Party A and $13M for Party B.

The amounts set for Clean Payment Limits are withm the discretion of Third Parties and Users, but some guidance and good practice are likely to emerge relatively quickly. As a rule, the Clean Payment Limit should equal or exceed the greater of the net payment amount in a currency (if any) or the single largest gross payment. If participants follow this guidance, then the GPM System will promote improved liquidity in payments systems by ensuring that payments liquidity flows to those making payments in a timely and sensible manner

The present mvention also has significant advantages for efficient liquidity management, cnsis management and information management.

Other Uses and Modifications

Many aspects of the present invention relate to participant interface techniques for generating, stonng, accessing and communicating information, data or messages which need not relate solely to payments or even financial transactions alone, but could relate to the controlled or balanced allocation of other resources.

While the illustrative embodiment of the GPM System descπbed above will have many applications to the financial industry, it is understood that vaπous modifications thereto will occur to those with ordinary skill in the art. However, all such modifications and variations are deemed to be withm the scope and spiπt of the present invention as defined by the accompanying Claims to Invention

Claims

C L A I M S

1. A system for reducing payments nsk, liquidity nsk and systemic risk associated with payments- based transactions, said system compπsmg: a communications network formed by the interlinking of a plurality of internet protocol (IP) networks; a plurality of User Host Applications supported over said communications network for use by plurality of Users active in payments-based transactions; a plurality of Third Party Host Applications supported over said communications network for use by plurality of Third Parties active m payments-based transactions; and a plurality of Payment Bank Host Applications supported over said communications network for use by a plurality of Payment Banks operating a plurality of domestic payment systems, each said Payment Bank Host Application having means for processing payment messages, including payments instructions to be earned out in said domestic payments system on behalf of a plurality of account holders (including bank correspondents), and where each said Payment Bank Host Application includes a filter process module for automated processing of said payments instructions based on (l) payments nsk parameters and (n) the accounts of said Users (User accounts) such that payments instructions breaching said payments πsk parameters are rejected back to a payments processing queue for later re -evaluation, thereby reducing payments nsk, liquidity πsk and systemic nsk throughout said system.

2 The system of claim 1. wherein each Third Party Host Application, said User Host Application and said Payment Bank Host Application sends payments πsk data and generates and receives payments-related notifications, inquiries, messages and reports via their respective host applications

3 The system of claim 1. wherein said Filter Process Module in each said Payment Bank Host Application is integrated with payments processing such that payments instructions are filtered for compliance using suspend payment instructions and said payments risk parameters.

4 The system of claim 1 , wherem each said Third Party Host Application and said User Host Application can request and receive - whether penodically or on-demand - multi-currency reports from said plurality of Payment Bank Host Applications.

5 The system of claim 1. wherein each said Payment Bank Host Application is capable of calculating the Available Balance for counteφarty payments using data interchange with existing payments confirmation services and monitoring elapsed time

6. The system of claim 5, wherein each said Payment Bank Host Application can generate a notification to the Payment Bank and User and/or Third Party in the event that a counteφarty fails to make expected payments for a pre-determmed peπod of elapsed time.

7. The system of claim 6, wherein each Third Party or User receiving notification of a counteφarty payment failure may instruct Payment Bank to suspend and/or reinstate further payments to said counteφarty.

8. The system of claim 6, wherein each said Payment Bank Host Application automatically incoφorates a suspension of all further payments to a counteφarty on receipt of a notification to do so via implementation as a trigger m said Filter Process Module.

9. The system of claim 1 , wherem each Payment Bank and User use digital certification to establish their access authonty and usage constraints, and wherein data transmissions over said communication network are encrypted for secuπty puφoses.

10. The system of claim 1 , wherein said Third Party, User and Payment Bank Host Applications are human-accessible by browser interface and machine-accessible by mcoφoration and translation of electronic data interchange formats

1 1. The system of claim 1 , wherem Third Parties and Users can flexibly identify counteφarties by means of aggregating identifiers unique to individual coφorate or organizational entities, creating thereby synthetic counteφarties composed of entities deemed to share correlation in payment risk assessment

12. The system of claim 1 , which further compπses a processor-based Core System being operably connected to said global communications network and supporting a Core System Host Application, wherein said Core System Host Application comprises information storage means for recording various type of information, including identification of said Users, identification of said Third Parties, identification of said Payment Banks, identification of said counteφarties, identification of currencies, specification of the Clean Payment Limit (Debit Cap), and Payment Type identification (including alternative payment channels, if any).

13 A method of reducing payments risk, liquidity nsk. and systemic risk m a system supporting a plurality of Third Party Host Applications, a plurality of User Host Applications, and a plurality of Payment Bank Host Applications, each said payment Bank Host Application has a Filter Process Module for processing payments instructions, said method compnsing the steps

(a) said Third Parties sending counteφarty payments πsk data to said Users associated with a plurality of payments-based transactions,

(b) said Users sending counteφarty payments πsk data on behalf of themselves and said Third Parties to said system, wherein said payments πsk data specifies transaction parameters selected from the group consisting of

(1) the User associated with each said payments-based transaction,

(n) the Third Party (if any) associated with each said payments-based transaction, (in) the Payment Bank associated with each said payments-based transaction, (IV) the ιntermedιary(ιes) in the chain of accounts leading to the counteφarty or ultimate payment beneficiary,

(v) the counteφarty associated with each said payments-based transaction,

(vi) the currency associated with each said payments-based transaction, (vn) the payment type associated with each said payments-based transaction, (vui) the Transaction Reference Number unique to each payment transaction, and (IX) the Clean Payment Limit associated with each said payments-based transaction,

(c) said system analysing the payments πsk data associated with each said payments-based transaction and decomposing said payments πsk data into files for transfer to said Payment Bank Host Applications making payments on behalf of said Users m a plurality of currencies,

(d) said system transmitting said payments πsk data, associated with each said payments- based transaction, to said Payment Bank Host Applications, using apphcation-to-apphcation automated interfaces, and

(e) each said Payment Bank Host Application applying said payments πsk data as input parameters to said Filter Process Module for automated evaluation of payments instructions in respect of accounts of said Users (User accounts) such that payments instructions breaching said input parameters to said Filter Process Module are rejected back to a payments processing queue for later re-evaluation in the absence of an overnde instruction

14 The method of claim 13, wherem each Third Party, User and Payment Bank sending payments risk data can also generate and receive payments-related notifications, inquiπes, messages and reports via their respective host applications

15 The method of claim 13, wherem said Filter Process Module within each said Payment Bank Host Application cooperates with payments processing ith said domestic payment system operated by said Payment Bank, such that payments instructions are filtered by said Filter Process Module for compliance with suspend instructions, overnde instructions and payment nsk parameters.

16. The method m claim 14, wherein each Third Party and User can request and receive reports from a plurality of said Payment Banks acting on their behalf.

17. The method of claim 13, wherem each said Payment Bank Host Application capable of calculating the Available Balance for counteφarty payments through mcoφoration of data interchange with existing payments confirmation services and momtoπng elapsed time

18. The method of claim 14, wherem each Payment Bank Host Application can generate a notification to the Payment Bank and User and or Third Party m the event that a counteφarty fails to make expected payments for a pre-determmed peπod of elapsed time and detail payments which have failed to pass the Filter Process according to their Transaction Reference Numbers

19. The method of claim 18, wherein each Third Party or User receiving notification of a counteφarty payment failure may instruct Payment Bank suspension of further payments to said counteφarty or instruct overnde of the Filter Process to allow individual identified payments to proceed or allow payments to specified counteφarties or intermedianes.

20 The method of claim 17, wherein each Payment Bank Host Application will automatically mcoφorate a suspension of all further payments to a counteφarty on receipt of a notification to do so via implementation as a trigger in the Filter Process Module and mcoφorate overrides as instructed

21. The method of claim 13, wherein each Payment Bank and User are subjected to digital certification to establish their access authoπty and usage constraints, and wherem data transmissions are encrypted for secuπty puφoses

22. The method of claim 13, wherem Third Party, User and Payment Bank host applications are human-accessible by browser interface and machine-accessible by mcoφoration and translation of electronic data interchange formats

23 The method of claim 13, wherein Third Parties and Users can flexibly identify counteφarties by means of aggregating identifiers unique to individual coφorate or organizational entities, creating thereby synthetic counteφarties composed of entities deemed to share correlation in payment πsk assessment

24. The method of claim 13, wherein said system further compπses Core System Host Application for recording vaπous type of information, including identification of said Users, identification of said Third Parties, identification of said Payment Banks, identification of said counteφarties, identification of currencies, specification of the Clean Payment Limit (Debit Cap), any overπde instructions, and Payment Type identification (including alternative payment channels, if any).

25. A global computer-based system for mitigating πsk ansmg in connection with foreign exchange settlements and other payments between financial market participants, wherem a mechanism is provided for efficiently controlling payments nsk m as many currencies as may be interoperable with said system.

26. A computer-based payment πsk management system, wherem a mechanism is provided for controlling payment flows withm a single domestic payment system and globally through a multi- currency implementation so that payment πsk is reduced between counteφarties.

27. A computer-based payment πsk management system, wherem a mechanism is provided for reducing payments nsk ansmg for an account holder within a single currency, as well as cross-border payments πsk ansmg from payments in a plurality of currencies.

28. A computer-based payment πsk management system, where a mechanism is provided for controlling payments πsk for all payment flows, whether ansmg from foreign exchange transactions or other payment types

29 A computer-based payment nsk management system, wherein a mechanism is provided for enabling a participant to unilaterally control his risk vis-a-vis a particular payments counteφarty, without the necessity for the counteφarty's agreement or cooperation.

30. A computer-based payment πsk management system, wherein a mechanism is provided for allowing participants to more efficiently manage their current business, reduce overhead, improve returns on capital, and support new business with counteφarties by reducing payments risk and enabling more efficient liquidity and credit πsk management

31 An Internet-based computer-based system, wherem separate accounts can be flexibly aggregated or disaggregated by participants for πsk management and reporting puφoses to promote effective oversight of group or individual participant use of the system

32. An Internet-based computer-based system, wherein separate counteφarty accounts can be flexibly aggregated or disaggregated for πsk management puφoses and reporting puφoses according to participant assessment of nsk correlation between affiliated, connected or similar counteφarties.

33. A computer-based system, wherem payment flows with a counteφarty or counteφarties in a plurality of currencies can be flexibly aggregated for πsk management puφoses and reporting puφoses.

34. A computer-based payments πsk reduction system that is consistent with and complementary to the existing network for inter-bank financial communications (S.W.I.F.T.) and the internet protocol networks increasingly used by financial institutions.

35. A computer-based payments πsk reduction system which allows individual participants to determine unilaterally their tolerances for payment πsk according to counteφarty, currency and payment type.

36. A computer-based payments nsk reduction system, wherem participants can view, enter and alter their nsk parameters for counteφarties, currencies and payment types on a real-time basis.

37. A computer-based payments nsk reduction system, wherein the payment parameters of account holders can be entered mto the database of the system by way of screen-entry, batch-entry or integration with internal systems processes.

38. A computer-based payments πsk reduction system, wherem payments πsk can be controlled m an automated manner through integration with the existing payments systems operating within payment banks directly connected to domestic payments systems.

39. A computer-based payments risk reduction system, wherein a mechanism is provided for enabling payment banks to integrate the system host application in a modular fashion in connection with their participation in domestic payment systems with a high degree of openness, flexibility and interoperability.

40. A computer-based payments nsk reduction, wherem a mechanism is provided for monitonng payment flows and reporting exception situations which may indicate a counteφarty payment failure.

41. A computer-based payments πsk reduction system for use by a payment bank, wherein a mechanism is provided for notifying account holders of payment problems mtra-day, enabling them to take such actions as will forestall any adverse impact on liquidity in that and other currencies.

42. A computer-based payments risk reduction system, wherem a mechanism is provided for inquiπng into exception situations between participants, counteφarties, intermedianes and payment banks, and facilitating earlier corrective action or remedial action as appropπate.

43. A computer-based payments πsk reduction, wherein account holders can notify payment banks in real-time of their wish to suspend any further payments to an individual counteφarty or intermediary or to overπde πsk parameters controlling payments to counteφarties or intermedianes.

44. A computer-based payments πsk reduction system for use withm a payment bank, having a mechanism for efficiently and effectively suspending any further payments to a particular counteφarty or intermediary on behalf of an account holder, following receipt of a request from an account holder to do so.

45. A computer-based system enabling automated calculation of global πsk positions based on payments activities in multiple payments systems.

46. The computer-based system of claim 45, wherein the advantages of Web-based information management, browser interfaces, apphcation-to-apphcation data interchange, object-oπented programming and open systems technologies are integrated to deliver improved flexibility, extensibility, modularity, interoperability and other information management advantages in connection with payments πsk management.

47. A computer-based system, wherein a mechanism is provided for reducing the systemic risk that a payment failure by one market counteφarty or intermediary may lead to failure of contingent payments down a chain of interrelated payments transactions, and thereby threaten the liquidity and lntegnty of payment and banking systems within a single market or globally.

48 The computer-based system of claim 47, wherem a participant's payments liquidity is optimally used to meet payment obligations m an automated manner.

49 The computer-based system of claim 47, wherein liquidity management software is employed to address cross-border payment πsk or payment πsk ansmg on the level of the individual account holder within a participating bank.

50 The computer based system of claim 47, wherein payment instructions can be processed very rapidly after negotiation of the underlying transaction without compromising payments risk mitigation.

51. The computer-based system of claim 47, wherem means are provided for enabling access via a plurality of internet protocol networks and a plurality of computing devices, and flexibility in the use and configuration of access software to meet individual functional requirements and capacity to support technological integration

52 The computer-based system of claim 47, wherein many-to-many data processing techniques are used to rationalise the flows of information between host applications located anywhere around the globe (in both developed and emerging markets) without the prejudices and disadvantages aπsing from geographical dispersion

53. The computer-based system of claim 47, wherein payment risk parameters and other data are entered mto the system and automatically mteφreted by rule-based mteφretation procedures as to processing requirements

54 The computer-based system of claim 47, wherem account holder payment parameters are managed on a database and communicated as operable parameters for payments processing by host applications m payment banks

55 The computer-based system of claim 47, which uses or teroperates with industry standard data formats for the capture and transmission of like data to enable efficient interface with pre-existing banking applications and systems

56 The computer-based system of claim 47, which provides appropπate secuπty and integπty for the transmission of all data across its network via cryptographically secure sessions and digital certification of host application subscribers.

57 A computer-implemented method of reducing risk in a payment-based transaction wherem payment is made from an account holder to a Counteφarty using a payment bank system operated by a payment bank, the method comprising the steps of receiving at least one user-supplied πsk parameter associated with the Counteφarty; receiving a first instruction authoπzmg payment from the account holder to the Counteφarty ; stonng the first instruction in a payment queue; dunng processing of the payment transaction, performing a πsk filter routine that determines whether to selectively reject payment authorized by the first instruction based upon the at least one user-supplied nsk parameter associated with the Counteφarty.

58. The computer-implemented method of claim 57, further compπs g the step of: generating the at least one user-supplied nsk parameter on a user system and communicating the at least one user-supplied nsk parameter to the risk filter routine.

59. The computer-implemented method of claim 57, wherein the πsk filter routine includes the steps of:

generating an available balance for the Counteφarty based upon the at least one user- supplied πsk parameter, payments made by the account holder, and payments received by the account holder;

reading the first instruction from the payment queue of the payment bank system; and

determining whether to selectively reject payment authonzed by the first instruction based upon the available balance.

60. The computer-implemented method of claim 59, wherem payment authonzed by the first instruction is rejected in the event that the amount of payment authorized by the first instruction exceeds the available balance.

61. The computer-implemented method of claim 59, wherein the first instruction is returned to the payment queue for later re -evaluation m the event that the amount of payment authonzed by the first instruction exceeds the available balance.

62 The computer-implemented method of claim 59, wherem the available balance is computed over a given time period based upon payments made by the account holder in the given time period and payments received by the account holder in the given time penod.

63. The computer-implemented method of claim 62, further comprising the steps of: receiving user-supplied updates to the at least one user-supplied nsk parameter; and updating the available balance to reflect such user-supplied updates.

64. The computer-implemented method of claim 63, further comprising the steps of: generating the user-supplied updates on a user system and communicating the user-supplied updates to the nsk filter routine.

65. The computer-implemented method of claim 62, further compnsmg the steps of: receiving updates to payments made by the account holder in the given time peπod; and receiving updates to payments received by the account holder in the given time penod; and updating the available balance to reflect such updates.

66. The computer-implemented method of claim 65. wherem updates to payments made by the account holder and updates to payments received by the account holder are received through data interchange with existing payments confirmation services.

67. The computer-implemented method of claim 62, further compnsmg the step of receiving user- supplied updates to the at least one user-supplied nsk parameter for use in the πsk filter routine.

68. The computer-implemented method of claim 67, further compnsmg the steps of: generating the user-supplied updates on a user system and communicating the user-supplied updates to the nsk filter routine

69. The computer-implemented method of claim 57, wherem the risk routine is executed by a module integrated into the payment bank system.

70. The computer-implemented method of claim 57, wherein the πsk filter routine is executed by a module that communicates to the payment bank system via an apphcation-to application interface which translates data formats between the module and the payment bank system.

71. The computer-implemented method of claim 69. wherem the at least one user-supplied nsk parameter is generated on a user system and communicated to a central server, which stores the at least one user-supplied risk parameter in a data server and forwards the at least one user-supplied risk parameter to the module integrated mto the payment bank system that executes the risk filter routine.

72. The computer-implemented method of claim 57, wherein the at least one user-supplied πsk parameter compπses a clean payment limit.

73. The computer-implemented method of claim 57, wherein the at least one user-supplied nsk parameter is associated with each payment-based transaction wherein payment is made from the account holder to the Counteφarty.

74. The computer-implemented method of claim 73, wherem the at least one user-supplied nsk parameter is selected from the group consisting of:

(I) currency associated with each payment-based transaction,

(n) payment type associated with each payment-based transaction, and

(in) a Clean Payment Limit associated with each payment-based transaction.

75. The computer-implemented method of claim 73, wherein the at least one user-supplied πsk parameter is associated with a first identifier that identifies the account holder and a second identifier that identifies the Counteφarty on the payment transaction.

76. The computer-implemented method of claim 75, wherem the account holder compπses a user with a pre-existing account relationship with the payment bank.

77. The computer-implemented method of claim 76, wherem the account holder further compπses a third party, and where the user is acting on behalf of the third party.

78. The computer-implemented method of claim 77, wherem said third party executes a third party host application that generates the at least one user-supplied πsk parameter and communicates the at least one user-supplied risk parameter and associated information to a user system, which forwards the at least one user-supplied information to the risk filter routine.

79 The computer-implemented method of claim 78. wherein only the user system can forward the at least one user-supplied πsk parameter communicated by the third party host application to the πsk filter routine.

80 The computer-implemented method of claim 75, wherein the first and second identifiers are Bank Identifier Codes or an aggregation of such codes.

81. The computer-implemented method of claim 75, wherem the Counteφarty comprises a beneficiary of the payment-based transaction.

82. The computer-implemented method of claim 81 , where the Counteφarty further compπses an intermediary to the beneficiary of the payment-based transaction.

83. The computer-implemented method of claim 57, wherem said πsk filter routine cooperates with other payment processing operated by said payment bank to determine whether to selectively reject payment authonzed by the first instruction.

84. The computer-implemented method of claim 57, wherem the πsk filter routine cooperates with a domestic payment system operated by said payment bank, such that the first instruction is filtered by said risk filter routine for compliance with a nsk profile generated from the at least one user-supplied nsk parameter.

85. The computer-implemented method of claim 57, further compnsmg the step of : for each given first instruction, when processing by the risk filter routine rejects payment authonzed by the given first instruction, adding the given first instruction to a cache of first instructions.

86. The computer-implemented method of claim 57, further compnsmg the step of communicating notification of rejection or success of at least one payment authonzed by the first instructions stored in a cache.

87. The computer-implemented method of claim 86, wherein said notification is communicated via messaging services operably coupling the user system, a central system, and the payment bank system.

88. The computer-implemented method of claim 87, wherem a third party application is operably coupled to the payment bank system, and wherem said notification is forwarded to said third party application by said payment bank system.

89. The computer-implemented method of claim 86, wherem said notification is generated m the event that the Counteφarty fails to make expected payments for a pre-determmed peπod of elapsed time

90. The computer-implemented method of claim 57, further compnsmg the steps of: receiving a user-supplied second instruction that identifies an account holder and Counteφarty, and m response to receipt of the user-supplied second instruction, suspending all payments from the account holder to the Counteparty as identified by the second instruction.

91. The computer-implemented method of claim 90, wherem the user-supplied second instruction is generated on a user system and communicated to a central server, which stores the user-supplied second instruction in a data server and forwards the user-supplied second instruction to a module integrated into the payment bank system that executes the πsk filter routine.

92. The computer-implemented method of claim 91 , where a third party executes a third party host application that generates the user-supplied second instruction and communicates the user-supplied second instruction to a user system, which forwards the user-supplied second instruction to the module integrated into the payment bank system via the central server.

93 The computer-implemented method of claim 90, further comprising the step of: communicating notification confirming receipt and implementation of the user-supplied second instruction to the payment bank, core server, user and third party, if any.

94. The computer-implemented method of claim 57, further compnsing the steps of: receiving a third instruction that identifies a particular first instruction; and in response to receipt of the third instruction, disabling processing of the nsk filter routine for the particular first instruction.

95 The computer-implemented method of claim 94, wherein the third instruction is generated on a user system and communicated to a central server, which stores the third instruction in a data server and forwards third instruction to a module integrated into the payment bank system that executes the nsk filter routine.

96 The computer-implemented method of claim 95, wherem a third party executes a third party host application that generates the third instruction and communicates the third instruction to a user system, which forwards the third instruction to the module integrated mto the payment bank system via the central server

97 The computer-implemented method of claim 95, further compnsmg the step of: returning notification confirming receipt and implementation of the third instruction to the payment bank, central server, user and third party, if any

98. The computer-implemented method of claim 94, wherein the third instruction is generated by the payment bank host application.

99. The computer-implemented method of claim 57, further compnsing the steps of: receiving a third instruction that identifies a particular Counteφarty; and in response to receipt of the third instruction, disabling processing of the πsk filter routine with respect to any first instruction authonzmg payment from the account holder to the Counteφarty.

100 The computer-implemented method of claim 99, wherein the third instruction is generated on a user system and communicated to a central server, which stores the third instruction in a data server and forwards the third instruction to a module integrated mto the payment bank system that executes the πsk filter routine.

101. The computer-implemented method of claim 100. wherem a third party executes a third party host application that generates the third instruction and communicates the third instruction to a user system, which forwards the third instruction to the module integrated into the payment bank system via the central server.

102. The computer-implemented method of claim 100, further compnsmg the step of: returning notification confirming receipt and implementation of the user-supplied third instruction to the payment bank, core server, user and third party, if any

103. The computer-implemented method of claim 99, wherein the third instruction is generated by the payment bank host application

104. The computer-implemented method of any of claims 90. 94, and 99. where the account holder comprises a user with a pre-existing account relationship with the payment bank.

105. The computer-implemented method of claim 104. wherem the account holder further comprises a third party, and wherem the user is acting on behalf of the third party as payment intermediary.

106. The computer-implemented method of claim 105, wherem said third party executes a third party host application that generates user-supplied instructions and communicates the user-supplied instructions to a user system, which forwards the at least one user-supplied instruction to the risk filter routine.

107. The computer-implemented method of any of claims 90,94, and 99, wherein the Counteφarty compπses a payment beneficiary of the payment-based transaction.

108. The computer-implemented method of claim 107, wherein the Counteφarty further compπses an intermediary to the payment beneficiary of the payment-based transaction.

109 The computer-implemented method of claim 57, further compnsmg the step of: using digital certification to establish access authoπty and usage constraints of the risk filter routine.

1 10. The computer-implemented method of claim 57, wherem data transmissions are encrypted for secuπty puφoses.

1 1 1. The computer-implemented method of claim 57, wherein users and the payment bank can also generate and receive payments-related notifications, inquiπes, messages and reports.

1 12 The computer-implemented method of claim 57, where users can request and receive multi- currency reports from a plurality of Payment Banks acting on their behalf.

113. The computer-implemented method of claim 57, wherem human-accessibility is provided by browser interfaces and data-accessibility is provided by electronic data interchange formats.

1 14 The computer-implemented method of claim 57, wherem said account holder and Counteφarty comprise multiple entities that are deemed to share correlation in payment πsk assessment, wherem the multiple entities are identified by an aggregate identifier.

1 15 The computer-implemented method of claim 57. further comprising the steps of: recording various type of information, including identification of Users, identification of Third Parties, identification of Payment Banks, identification of Counteφarties, identification of Currencies, specification of the Clean Payment Limit, and Payment Type identification.

1 16 The computer-implemented method of claim 57, wherein selective rejection of payment authonzed by the first instruction reduces payment πsk ansmg from default by the Counteφarty and any liquidity nsk and system risk ansmg therefrom in like amount

1 17 A system for reducing risk in payment-based transactions compnsmg' a payment bank subsystem, operated by a payment bank, that processes a payment-based transaction wherein payment is made from an account holder to a Counteφarty, wherein the payment bank subsystem includes a queue stonng a first instruction authonzmg payment from the account holder to the Counteφarty dunng processing of the transaction; and

a module, integrated with the payment bank subsystem, that stores at least one user-supplied πsk parameter associated with the account holder, and includes a πsk filter routine that operates duπng processing of the transaction to determine whether to selectively reject payment authonzed by the first instruction stored in the queue based upon the at least one user-supplied risk parameter associated with the Counteφarty.

1 18. The system of claim 1 17. wherein the risk filter routine

generates an available balance for the Counteφarty based upon the at least one user- supplied πsk parameter, payments made by the account holder, and payments received by the account holder;

accesses a first instruction stored in the queue; and

determines whether to selectively reject payment authonzed by the first instruction based upon the available balance.

1 19 The system of claim 1 18, wherem the πsk filter routine rejects payment authorized by the first instruction in the event that the amount of payment authorized by the first instruction exceeds the available balance.

120. The system of claim 1 18, wherem the πsk filter routine returns the first instruction to the payment queue for later re-evaluation

121. The system of claim 1 18, wherem the risk filter routine computes the available balance over a given time period based upon payments made by the account holder in the given time period and payments received by the account holder in the given time peπod.

122. The system of claim 121 , where the risk filter routine receives user-supplied updates to the at least one user-supplied risk parameter, and updates the available balance to reflect such user-supplied updates

123. The system of claim 121 , wherein the πsk filter routine receives updates to payments made by the account holder in the given time peπod and updates to payments received by the account holder m the given time peπod, and re-computes the available balance to reflect such updates.

124. The system of claim 123, further compnsmg a payment confirmation service, and wherem the πsk filter routine receives updates to payments made by the account holder and updates to payments received by the account holder through data interchange with the payments confirmation service.

125. The system of claim 1 17, wherem the module communicates to the payment bank subsystem via an apphcation-to application interface which translates data formats between the module and the payment bank subsystem.

126. The system of claim 1 17, wherein the at least one user-supplied πsk parameter comprises a clean payment limit.

127 The system of claim 1 17, wherem the at least one user-supplied πsk parameter is associated with each payment-based transaction wherein payment is made from the account holder to a Counteφarty.

128 The system of claim 127, wherem the at least one user-supplied πsk parameter is selected from the group consisting of:

(I) currency associated with each payment-based transaction,

(n) payment type associated with each payment-based transaction, and

(in) a Clean Payment Limit associated with each payment-based transaction;

129 The system of claim 127, wherem the at least one user-supplied risk parameter is associated with a first identifier that identifies the account holder and a second identifier that identifies the Counteφarty as payment beneficiary or intermediary on the payment transaction.

130 The system of claim 129, wherem the account holder comprises a user with a pre-existing account relationship with the payment bank.

131 The system of claim 130, wherem the system includes a user subsystem executing a user host application that generates the at least one user-supplied risk parameter on a user subsystem and communicates the at least one user-supplied nsk parameter to the module for use in the risk filter routine.

132. The system of claim 131 , wherein the user subsystem generates user-supplied updates to the at least one user-supplied πsk parameter and communicates the user-supplied updates to the module for use m the πsk filter routine.

133. The system of claim 130. wherein the account holder further compπses a third party, and wherem the user is acting on behalf of the third party.

134. The system of claim 133. further compnsing a third party host application that enables the third party to generate the at least one user-supplied nsk parameter and communicate the at least one user- supplied nsk parameter and associated information to a user subsystem, which forwards the at least one user-supplied information to the module for use in the πsk filter routine.

135. The system of claim 134, wherein the third party host application enables the third party to generate updates to the least one user-supplied πsk parameter and communicate the updates and associated information to a user subsystem, which forwards the updates and associated information to the module for use in the πsk filter routine.

136. The system of claim 134, wherem only the user subsystem can forward the at least one user- supplied risk parameter communicated by the third party host application to the module for use m the πsk filter routine.

137. The system of any of claims 130 to 136, wherem user-supplied risk parameter and updates thereto are communicated from the user subsystem to a central server, which stores the at least one user-supplied πsk parameter and updates thereto in a data server and forwards the user-supplied risk parameter and updates thereto to the module for use in the πsk filter routine

138 The system of claim 129. herem the first and second identifiers are Bank Identifier Codes

139. The system of claim 129. wherein the Counteφarty comprises a payment beneficiary of the payment-based transaction.

140 The system of claim 139, wherein the Counteφarty further comprises an intermediary to the beneficiary of the payment-based transaction

141. The system of claim 1 17, wherein said nsk filter routine cooperates with other payment processing operated by said payment bank to determine whether to selectively reject payment authonzed by the first instruction.

142. The system of claim 1 17, wherem the πsk filter routine cooperates with a domestic payment system operated by said payment bank, such that the first instruction is filtered by said πsk filter routine for compliance with a πsk profile generated from the at least one user-supplied πsk parameter.

143. The system of claim 1 17, wherem the risk filter routine, when processing a given first instruction results in a determination to selectively reject payment authonzed by the given first instruction, and, whether selectively rejected or not, adds the given first instruction to a cache of first instructions.

144. The system of claim 143, wherein the nsk filter routine tπggers communication of a notification of rejection of at least one payment authonzed by the first instructions stored in the cache to a user subsystem of the Payment Bank.

145. The system of claim 144, wherem said notification is communicated via messaging services operably coupling the user subsystem, a central subsystem, and the payment bank subsystem.

146. The system of claim 145, further compnsmg a third party application operably coupled to the user subsystem., wherein said notification is forwarded to said third party application by said user subsystem.

147. The system of claim 144, wherem said notification is generated in the event that the Counteφarty fails to make expected payments for a pre-determmed period of elapsed time.

148 The system of claim 1 17, wherem the risk filter routine: receives a user-supplied second instruction that identifies an account holder and Counteφarty; and in response to receipt of the user-supplied second instruction, suspends all payments from the account holder to the Counteφarty as identified by the second instruction.

149. The system of claim 148, wherem the user-supplied second instruction is generated on a user subsystem and communicated to a central server, which stores the user-supplied second instruction in a data server and forwards the user-supplied second instruction to a module integrated into the payment bank subsystem that executes the risk filter routine.

150. The system of claim 149, wherein a third party executes a third party host application that generates the user-supplied second instruction and communicates the user-supplied second instruction to a user subsystem, which forwards the user-supplied second instruction to the module integrated into the payment bank subsystem via the central server.

151. The system of claim 148, wherem the πsk filter routine tπggers communication of notification confirming receipt of the user-supplied second instruction to the payment bank subsystem, core server, user subsystem and third party subsystem, if any.

152. The system of any of claims 148 to 151 , wherein the πsk filter routine: receives a third user-supplied instruction that identifies an account holder and Counteφarty; and in response to receipt of the third user-supplied instruction, reinstates payments from the account holder to the Counteparty as identified by the instruction by countermanding a previously communicated second instruction.

153. The system of claim 1 17, wherein the πsk filter routine: receives a third instruction that identifies a particular first instruction; and in response to receipt of the third instruction, disables processing of the πsk filter routine for the particular first instruction.

154. The system of claim 153, wherem the third instruction is generated on a user subsystem and communicated to a central server, which stores the third instruction in a data server and forwards third instruction to a module integrated mto the payment bank subsystem that executes the πsk filter routine.

155 The system of claim 154, wherem a third party executes a third party host application that generates the third instruction and communicates the third instruction to a user subsystem, which forwards the third instruction to the module integrated into the payment bank subsystem via the central server.

156. The system of claim 153, wherem the risk filter routine returns notification confirming receipt of the third instruction.

157. The system of claim 153, wherem the third instruction is generated by the payment bank subsystem.

158. The system of claim 1 17, wherem the risk filter routine: receives a third instruction that identifies a particular account holder and particular Counteφarty: and m response to receipt of the third instruction, disables processing of the πsk filter routine with respect to any first instruction authonzmg payment from the particular account holder to the particular Counteφarty.

159. The system of claim 158, wherein the third instruction is generated on a user subsystem and communicated to a central server, which stores the third instruction in a data server and forwards the third instruction to a module integrated mto the payment bank subsystem that executes the πsk filter routine.

160. The system of claim 159, wherein a third party executes a third party host application that generates the third instruction and communicates the third instruction to a user subsystem, which forwards the third instruction to the module integrated mto the payment bank subsystem via the central server.

161. The system of claim 158, wherem the nsk filter routine returns notification confirming receipt of the user-supplied third instruction.

162. The system of claim 158, wherein the third instruction is generated by the payment bank subsystem.

163. The computer-implemented method of any of claims 148,153, and 158, wherem the account holder compπses a user with a pre-existing account relationship with the payment bank.

164. The system of claim 163, wherein the account holder further compπses a third party, and wherem the user is acting on behalf of the third party.

165. The system of claim 164, wherem said third party executes a third party host application that generates user-supplied instructions and communicates the user-supplied instructions to a user subsystem, which forwards the at least one user-supplied information to the risk filter routine.

166. The system of any of claims 148, 153, and 158. wherein the Counteφarty comprises a beneficiary of the payment-based transaction.

167 The system of claim 166, wherem the Counteφarty further compπses an intermediary to the beneficiary of the payment-based transaction.

168. The system of claim 1 17, wherem digital certification is used to establish access authority and usage constraints of the πsk filter routine.

169. The system of claim 1 17, wherein data transmissions are encrypted for secuπty puφoses.

170. The system of claim 117, wherein users and the payment bank can also generate and receive payments-related notifications, inquiπes, messages and reports.

171 The system of claim 1 17, wherem users can request and receive multi-currency reports from a plurality of Payment Banks acting on their behalf.

172. The system of claim 117, wherein human-accessibility is provided by browser interfaces and data- accessibi ty is provided by electronic data interchange formats.

173. The system of claim 1 17, wherem said account holder or Counteφarty may compπse multiple entities that are deemed to share correlation in payment nsk assessment, wherem the multiple entities are identified by an aggregate identifier.

174. The system of claim 1 17, further compnsing a central core that records vanous type of information, including identification of Users, identification of Third Parties, identification of Payment Banks, identification of Counteφarties, identification of Currencies, specification of the Clean Payment Limit, and Payment Type identification.

175. The system of claim 1 17, wherem selective rejection of payment authonzed by the first instruction minimizes payment nsk ansmg from default by the Counteφarty and any liquidity nsk and system nsk ansmg therefrom.

176. The system of claim 169, wherem the data transmissions occur over a VPN that uses the Internet and other internet protocol telecommunication networks.

177. The system of claim 1 17, wherem the πsk filter routine controls the flow of payment messages from the payment queue to a domestic payment system for clearance

178. The system of claim 1 17, wherein the first instruction comprises a S W.I. FT payment transaction

179. The system of claim 124, wherem updates to the payments made by the Counteφarty and updates to payments received by the Counteφarty comprise S.W.I.F.T. messages.

180. The system of claim 117, wherein the πsk filter routine mteroperates with a plurality of payment channels for any given currency.

181. The system of claim 180, wherem said plurality of payment channels includes net payment systems, real-time gross payment systems and lntra-bank book transfers.

182. The system of 117, wherein the πsk filter routine operates, m the event that there are multiple Counteφarties of an account holder for a given first instruction, to iteratively evaluate the given first instruction for compliance with the at least one user-supplied πsk parameter as applicable to each Counteφarty.

183 The system of claim 1 17, wherein the Counteφarty compπses one of payment beneficiary and intermediary

184 The system of claim 1 17, wherem the πsk filter routine' receives a user-supplied second instruction that identifies an account holder and Counteφarty; and m response to receipt of the user-supplied second instruction, reinstates all previously suspended payments from the account holder to the Counteφarty as identified by the second instruction.

185. The computer-implemented method of claim 1 10, wherem the data transmissions occur over a virtual pπvate network that uses the Internet and other internet protocol telecommunications networks.

186. The computer-implemented method of claim 57, where the risk filter routine controls the flow of payment messages from the payment queue to a domestic payment system for clearance.

187 The computer-implemented method of claim 57, wherein the first instruction compπses a S.W.I.F.T. payment transaction.

188 The computer-implemented method of claim 66. where updates to the payments made by the Counteφarty and updates to payments received by the Counteφarty compπse S.W.I.F.T. messages

189 The computer-implemented method of claim 57, wherein the πsk filter routine mteroperates with a plurality of payment channels for any given currency.

190 The computer-implemented method of claim 189. wherein said plurality of payment channels includes net payment systems, real-time gross payment systems and intra-bank book transfers

191. The computer-implemented method of 57, wherem the πsk filter routine operates, in the event that there are multiple Counteφarties of an account holder for a given first instruction, to iteratively evaluate the given first instruction for compliance with the at least one user-supplied πsk parameter as applicable to each Counteφarty.

192. The computer-implemented method of claim 57, wherein the Counteφarty compπses one of payment beneficiary and intermediary.

193 The computer-implemented method of any of claims 90 to 93, further compnsmg the steps of: receiving a user-supplied third instruction that identifies an account holder and Counteφarty; and m response to receipt of the user-supplied third instruction, reinstating payments from the account holder to the Counteparty as identified by the third instruction by countermanding a previously communicated second instruction.