The total funds a participant in a payment system has available for settlement of transactions at any moment.
Calculated as a total of some pre-defined components:
- opening balance
- net value of credits and debits processed but not applied yes
- usable minimum reserve requirement
- account limits
- collaterals (loans, pledged securities, pledged stock options etc.)
This is the total value of all the assets a participant in a payment system can use as liquid funds.
This is a series of posts with definitions for the jargon used in #banking, #fintech and #payments.
Too many people use some terms without understanding them beyond the definition.
Too many “experts” use the terms but they never had experience with the actual implementation of anything in #banking, #fintech and #payments.