Interoperability in payments refers to the ability of different payment systems, networks, and financial institutions to work together and exchange information seamlessly. This allows customers to make payments and transfer funds using their preferred payment method, regardless of the technology or infrastructure used by the payee.
For example, if a customer wants to make a payment using their bank’s mobile app, but the payee only accepts payments through a different payment processor, interoperability would allow the transaction to be completed smoothly without the need for the customer to sign up for a new payment method or open a new account.
There are several types of interoperability in payments, including:
- Interoperability between different payment systems: This refers to the ability of different payment systems, such as credit card networks or electronic payment platforms, to work together and exchange information.
- Interoperability between different financial institutions: This refers to the ability of different banks, credit unions, and other financial institutions to exchange information and facilitate payments between their customers.
- Interoperability between different payment networks: This refers to the ability of different payment networks, such as ACH (Automated Clearing House) or SWIFT (Society for Worldwide Interbank Financial Telecommunication), to work together and facilitate the transfer of funds between institutions.
Overall, interoperability in payments is important because it enables customers to make payments and transfer funds easily and efficiently, regardless of the payment methods or systems used by the payee.
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This page was last updated on January 2, 2023.
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