Stefan Henningsson, Jonas Hedman and Bo Andersson
The krone is part of ISO as well and has the ISO 4217 Code of DDK. Furthermore the krone is pegged, since1999, to the euro via the European Union ' s exchange rate mechanism( ERM II) after having negotiated an opt‐out from participation under the Edinburgh Agreement in 1992. Its exchange rate is tied to within 2.25 % of the euro. This will enable Denmark to join adopt the single currency at a later stage on the same terms as those applying to the initial euro area member states.
4.4.1 National Bank
The national bank issue Danish banknotes and coins. In addition, Danmarks Nationalbank acts as settlement bank for a number of financial institutions via the payment system, Kronos. This system is linked to Target 2 for funds transfers between nations. The national bank of Denmark ensures that the exchange rate to the Euro is keep, by buying or selling Krones.
4.4.2 NETS
The Danish banks were among the first in the world to develop and invest in electronic payment services in the 1960s. The banks established PBS in 1968 to develop and deploy payment solutions and associated services on the Danish market. In 1974 a direct debit was introduced and in 1983, PBS introduced the national debit card, the Dankort.
Nets is the leading payment service provider in Scandinavia providing payment & information services. Nets was formed in 2009 as merger between Danish PBS Holding A / S and Norwegian Nordito AS. The company processes almost all payment cards in Denmark. In addition, Nets provide Betalingsservice, AvtaleGiro, eFaktura, secured front‐end and back‐end solutions, and e‐security of electronic document signing.
In 2010 and 2011, Nets invested a lot of resources in the planning and development of new common Nordic IT platforms to replace the previous Norwegian and Danish platforms. The new common systems will be implemented on a rolling basis in 2012. Innovative new platforms will be added, the first example of which is the mobile payment solution Mobilpenge, which was launched in January 2012 and which forms a link between the mobile phone and the user’ s bank account.
4.5 Summary and analysis
In this section we will show the role of legal and technical architectural control points, see table 1 for a summary. Two key historical control points affects today’ s payment infrastructure. First is that they are fiat money, i. e. they are not worth anything by themselves. Second is that money are representational, i. e. they represent some thins, e. g. Euro or Krone. These two, control points underlie the entire payment infrastructure and affects the legal system, including its standards, and all the information technology that supports payments.
On an international level powerful actors, such as WTO and UN, aims to draw and maintain the basic foundations of the payment infrastructure, by developing model laws and international agreements that becomes architectural control points. Many of these agreements become standards such as ISO standards, e. g. ISO 9362 bank identifier codes( BICs). This standard is implemented by thousands of banks around the world and is used in the SWIFTnetwork. Visa and Mastercard provide global payment infrastructures, including the card and access to payment terminals, which are becoming standard for card payments.
Europe’ s payment infrastructure consists of an overall infrastructure that links the independent member infrastructures. The ECB is the central node. Target 2 system controls interbank fund transfers and utilizes the existing payment transfer standards under the rules of the Eurozone. SEPA is the new directive that is under implementation across Europe. It forces every member state to adopt( harmonize) its payment infrastructure, such information technology and legal framework
The national level, in our case Denmark, involve actors, such as the national bank, banks, and Nets, that both tries to maintain the current infrastructure but at the same time to develop new payment solutions that meets global requirements. Nets collaborate with Mastercard and Visa regarding the international card transactions in Denmark, whereas Danish banks co‐brand the Dankort with Mastercard and Visa.
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