"Maintain financial stability through preserving safety and efficiency in payment systems and secure the availability of convenient payment services at the level of broad customer use and reach to sustain the Egyptian national economy hence mounting up with Egypt as a payment systems model".
What is a payment system
"A payment system is a set of instruments, procedures and rules for the transfer of funds among participants (credit or financial institutions) in the systems, relying on an agreement between the participants in the system and the system operator. The funds transfer is performed via an agreed upon technical infrastructure"
Source: CPSS report "Core principles" January 2001.
The Egyptian National Payment System comprises a functional core responsibility in the formulation of the financial infrastructure of the nation. It consists of the Real Time Gross Settlement System (RTGS) for large value payments, book entry system for Governmental Securities, in addition to the Cheques Clearing House for cheques clearing and netting, the National Switch (123 brand) for ATM transactions, and the Automated Clearing House operated by Egyptian Banks Company (EBC), besides the Central Securities Depository at Misr for Central Securities Depository (MCSD). The National Payment System consists as well of all payment services provided by banks to customers, including Internet, Mobile, and Phone Banking, All Governmental Payment and Collection services, and Bill Payment Services.
The importance of The Payment Systems function emerges from the plain fact that it is one of three chief triangular bases to Central banks' functions as defined by the Bank of International Settlement. Such three bases are Monetary Policy, Banking Supervision and Payment Systems, where the Payment Systems act as a basic financial infrastructure component to realize a significant portion of financial stability within the market.
Central Bank objectives related to Payment Systems
- Encourage the development of payment systems and services in Egypt
- Promote the efficiency and use of electronic payment services.
- Secure Integration and interoperability of payment systems and services.
- Ensure a sound legal foundation for all payment systems and services.
- Develop standards, rules and guidelines for operation of payment systems.
- Adhere to stated standards, rules and guidelines.
- Adopt Risk controlled Payment Systems and Services.
- Protect customers of Payment services and participants of Payment Systems.
- Fight criminal acts related to Payment instruments.
- Maintain competitive Payments' market conditions.
- Encourage cooperation and collaboration between the Egyptian payment stakeholders.
- Promote cooperation with regional and international bodies.
- Promote direct and indirect participation in local and international payment systems.
Role of Central Bank in the National Payment System
By law no. 88 for the year 2003 and its amendments, The Central Bank of Egypt's role with respect to payment systems is that "The Central Bank shall take the means with which it ensures the realization of its objectives and the discharge of its functions. It shall, in particular, have the following powers: G. supervising the national payment system.
It is worth mentioning that the Payment Systems Department within the Central Bank of Egypt plays three major roles in the Payments' market which are:
- operating a number of payment systems.
- overseeing payment systems and services in Egypt, such oversight is carried out through setting standards, regulations and licensing payment systems and services
- finally acting as a catalyst for change in the payments market.
The CBE has contributed to building different components of the National Payment System, opening new horizons in electronic fund transfer (EFT) in Egypt. The Importance to move to EFT is apparent in enhancing the flow of cash in the economy, hence increasing the GDP. And the importance for CBE to lead such initiatives is to ensure trust of the users, protect consumers, regulate the market and ensure competitive market conditions.