What is a payment system?
A payment system is distinguished by the mode of exchange used to transfer value in an economic exchange of goods and services. Payment systems have a set of instruments, procedures and rules for the transfer of funds among participants. Hence, payment is the way buyers and sellers agree to transfer goods and services between them to complete a transaction.
What are some payment instruments?
There are two general classifications of payment instruments, namely cash or non-cash. Cash is generally paper-based while non-cash instruments can either be paper-based or electronic-based. Other payment instruments are cheque, credit card, debit card, money orders, wire transfers and travelers cheque.