Trace the historical deveopment of payment systems from cash to Research Paper

Trace the historical deveopment of payment systems from cash to negotiable instruments to electonic funds transfer and debit cards - Research Paper Example s related to payment systems for the business transactions (Economy Watch, â€Å"Global Economy†) In this regard, organizations and inhabitants are able to undertake the operations nationally as well as in a global context with better efficiency and effectiveness. The transactions include transfer of goods and/or services, investment and fund among others. Thus, in the modern day context numerous transactions take place on a daily basis. These transactions deal with acquisition of financial assets, goods and other services. In this regards, a well defined payment system significantly aids to recognize as an important function in order to eliminate the fictions in the trading environment (BSP, â€Å"What is a payment system?†). Payment system comprises of various instruments, banking procedures along with the interbank transfer of funds to regulate the transfer of funds both nationally and internationally environment. Banking transaction between the parties is an important medium in the developed economy for making payments. Besides, the payment system is an important part of the economic and financial infrastructure. The effective functioning of the payment system enables the transaction to be completed safely and within the time. Moreover, the payment system is highly affected due to the high exposure of risk to the parties to the contract. Thus, the consideration of the proper security measure in order to control the feature of payment system is also very important to mitigate the risk related to it (CPSS 431-449) Correspondingly, the payment system allows the buyers and sellers to complete the transaction in very safe and timely manner in electronic forms. In this regard, it can also be affirmed that t he payment system is the key determinant of financial markets to settle the trading agreements that include government securities, stocks, foreign exchange, commercial paper and bonds among others. Likewise, there are various risks attached to the payment system