Stefan Henningsson, Jonas Hedman and Bo Andersson
payment infrastructure more efficient and old banking collaboration, e. g. SWIFT, develop and maintain communication standards and communication network.
4.3.1 The EURO
Most countries in Europe are part of the Eurozone, with some of the exceptions like Denmark, England and Sweden. This is an economic and monetary union of 17 European Union( EU) member states that have adopted the euro( an ISO 4217 code) as their common currency and sole legal tender. Monetary policy of the zone is the responsibility of the European Central Bank( ECB). It is the central bank for the euro and administers the monetary policy of the 17 EU member state. The Treaty of Amsterdam established the bank in 1998( Kokkola, 2010).
The primary objective of the European Central Bank is to maintain price stability within the Eurozone. In addition ECB implement the monetary policy of the Eurozone, conduct foreign exchange operations, promote smooth operation of the financial market infrastructure under the TARGET2 payments system. TARGET 2 is the core interbank transfer system in Europe. Furthermore, ECB has the exclusive right to authorize the issuance of euro banknotes.
4.3.2 SEPA
SEPA is a payment integration project initiated by the EU. The aim is to improve the efficiency of cross‐border payments and turn the fragmented national markets for euro payments into a single domestic one. SEPA will enable customers to make cashless euro payments to anyone located anywhere in the area, using a single bank account and a single set of payment instruments. This includes the development of common financial instruments, standards, procedures, and infrastructure to enable economies of scale. For instance, in 2008 the pan‐European payment instruments for credit transfers was in affect and by 2010 all present national payment infrastructures and payment processors were expected to be in full competition to increase efficiency through consolidation and economies of scale.
4.3.3 SWIFT
The Society for Worldwide Interbank Financial Telecommunication( SWIFT) was founded in Brussels in 1973. SWIFT provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment. The first message was sent in 1977. SWIFT ' s first United States data center started in 1979. SWIFT also markets software and services to financial institutions, much of it for use on the SWIFT network, and ISO 9362 bank identifier codes( BICs). The SWIFT network link more than 9,000 financial institutions in 209 countries are exchanging an average of over 15 million messages per day. SWIFT does not facilitate funds transfer; rather, it sends payment orders, which must be settled by correspondent accounts that the institutions have with each other. SWIFT has become the industry standard for syntax in financial messages. Messages formatted to SWIFT standards can be read by, and processed by, many well‐known financial processing systems, whether or not the message traveled over the SWIFT network.
The SWIFT secure messaging network was run from two redundant data centers, one in the United States and one in the Netherlands. SWIFT opened a third data center in Switzerland, which started operating in 2009, since then data from European SWIFT members will no longer be mirrored to the US data center. The American intrusion of the SWIFT network forced SWIFT to change its architecture to satisfy member privacy concerns by implementing the new distributed architecture with a two‐zone model for storing messages. Concurrent to this process, the European Union negotiated an agreement with the United States Government to permit the transfer of intra‐EU SWIFT transaction information to the United States under certain circumstances.
4.4 Danish payment infrastructure
Money has a long history in Denmark and“ Knud den Store”( Canute the Great) started coinage in the 1020s. The Danish“ Krone” has been the official currency of Denmark, since 1875. The krone was a result of the Scandinavian Monetary Union( Denmark, Norway and Sweden), which came into effect in 1873 and lasted until World War I( Jensen, 2001).
244