Delivery versus Payment (DvP)
Definition:
Mechanism used in securities transfers transactions, which ensures that the final transfer of the securities (the delivery) can be considered completed only if the actual payment for the transaction has been made.
Details:
This is used when a financial institution is selling securities to another financial institution and the actual transfer of the securities is linked to the execution of a payment lag.
In layman terms, when you buy something from a e-commerce site that is a “delivery versus payment” type of operation.
Note:
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.