Module Code: H9PTS
Long Title Payments and Transaction Services 
Title Payments and Transaction Services 
Module Level: LEVEL 9
EQF Level: 7
EHEA Level: Second Cycle
Credits: 5
Module Coordinator: Rohit Verma
Module Author: Andrea Del Campo Dugova
Departments: School of Computing
Specifications of the qualifications and experience required of staff

Lecturer    PhD/Master’s degree in a computing or cognate discipline. May have industry experience also.
Tutor    PhD/Master’s degree in a computing or cognate discipline. May have industry experience also.
Learning Outcomes
On successful completion of this module the learner will be able to:
# Learning Outcome Description
LO1 Critically analyse Payments and Transaction Services innovations and the Financial and Economics architecture underpinning same
LO2 Investigate and evaluate key concepts relating to Payments and Transaction Services and financial and regulatory plumbing essential to support this economic activity.
LO3 Contextualise and utilise current approaches, applications and technologies in order to develop empirical research using machine learning techniques
LO4 Critically review the economic and financial evolution to modern payment systems
Dependencies
Module Recommendations

This is prior learning (or a practical skill) that is required before enrolment on this module. While the prior learning is expressed as named NCI module(s) it also allows for learning (in another module or modules) which is equivalent to the learning specified in the named module(s).
No recommendations listed
Co-requisite Modules
No Co-requisite modules listed
Entry requirements

Programme entry requirements must be satisfied.
 

Module Content & Assessment

Indicative Content
The Evolution of Payments
Evolving Payment Technologies through history
EU Directives on Digital payments I, Money, Banking and Financial Intermediation Fedwire and Target2
Financial intermediation and conventional payment and transaction technologies. Newer platforms (Paypal, Apple Pay, Google Pay, Square, TransferWise) with telecom-and-bank enabled systems (M-Pesa, Equitel), Blockchain/Crypto-based projects (Ripple), corporate initiatives (Facebook’s Libra)
Liquidity, Solvency Central Banks and Fixed Income instruments, Securitization
Balance sheet model. Equity as an option. The role central banks play in ensuring liquidity. Debt markets as an essential conduit for borrowing and clearing.
Blockchain Technological Opportunities and Challenges The potential for stablecoins
Is Blockchain a viable technology in the payments space? Or will advances in computing make distributed ledger technology cheaper and more flexible and, if so, when? What frontiers of computer science and encryption are relevant to this financial space. What potentially is the role for stablecoins?
Empirical Modelling Lending Decisions Interest rate modelling.
Build machine learning models to predict the probability that a loan defaults or a mortgage is approved. Modelling interest rates as the cost money and the cost of financial transactions. How will funds management be affected by FinTech? Will P2P platforms like lending club replace bank lending? Credit Enhancement, CDS and Government Guarantees.
Central Bank and Digital Currency Implications for Banks and Financial Systems. Clearing Houses, Credit risk, Centralised Counterparties and Dodd Frank 2010.
Central banks started life as the clearinghouses. Banks all kept accounts at the “central bank” and they used these accounts to settle payments with other banks. The role of ISDA master agreements in clearing swaps and managing collateral. In future Blockchain may decentralise this process but liquidity/solvency will be pressing issues. Derivative markets clear with the operation of margin accounts and centralised counterparties. In future, the landscape of payments and clearing maybe altered by arrival of blockchain technology.
Regulatory Framework EU Directives on Digital payments II
Regulatory issues raised by digital innovations are vast and far reaching. Would the issuer of a digital currency used globally have significant amounts of market power? Would its dominance hinder further innovation?
International Monetary System and Data Protection
On payments systems, what will be the role of cryptocurrencies vis a vis fiat money and private money creation by banks? How will this affect central banks? How would the confidentiality of users’ data be protected while at the same time preventing illicit use of the technology for money laundering, tax evasion and terrorist finance?
Money Supply, Inflation and Cryptocurrencies
The quantity theory of money and inflation. Bitcoin as a hedge against inflation. How money supply correlates with Liquidity? Understanding liquidity and the regulation of liquidity in the banking system. What measures are conventionally applied to manage liquidity in banking.
Financial Inclusion, Fiat Money and Social Product
The proposed Libra project has highlighted the question of whether a private label digital currency would enhance financial inclusion. In developing countries in particular existing telecom-enabled platforms like M-Pesa and Equitel have already delivered the bulk of these benefits. What other initiatives can be undertaken to serve the unbanked and integrate them into the payment system.
Interest rate Determination. Default Risk and Collateral
The cost of money is interest and is central to understanding the financial architecture of payments. How is this conventionally managed?
Deposit insurance. How to level the playing Field
Maintaining liquidity in the payment system that banks operate involves providing government guarantees like deposit insurance. Where do the FinTechs fit. Estimating the cost of deposit insurance.
Assessment Breakdown%
Coursework100.00%

Assessments

Full Time

Coursework
Assessment Type: Formative Assessment % of total: Non-Marked
Assessment Date: n/a Outcome addressed: 1,2,3,4
Non-Marked: Yes
Assessment Description:
Formative assessment will be provided on individual or group activities. Feedback will be provided in written or oral format, or on-line through Moodle. In addition, in class discussions will be undertaken as part of the practical approach to learning.
Assessment Type: Continuous Assessment % of total: 40
Assessment Date: n/a Outcome addressed: 3
Non-Marked: No
Assessment Description:
Student should write a series of short essays relating to payments and clearing infrastructure and develop a number of financial models relating to the measurement of loan/deposit guarantees
Assessment Type: Project % of total: 60
Assessment Date: n/a Outcome addressed: 1,2,3,4
Non-Marked: No
Assessment Description:
Empirical estimation and modelling with production of research paper.
No End of Module Assessment
No Workplace Assessment
Reassessment Requirement
Coursework Only
This module is reassessed solely on the basis of re-submitted coursework. There is no repeat written examination.
Reassessment Description
The repeat strategy for this module is by project that covers all learning outcomes.

NCIRL reserves the right to alter the nature and timings of assessment

 

Module Workload

Module Target Workload Hours 0 Hours
Workload: Full Time
Workload Type Workload Description Hours Frequency Average Weekly Learner Workload
Lecture Classroom and demonstrations 24 Per Semester 2.00
Tutorial Mentoring and small-group tutoring 12 Per Semester 1.00
Independent Learning Independent learning 89 Per Semester 7.42
Total Weekly Contact Hours 3.00
Workload: Blended
Workload Type Workload Description Hours Frequency Average Weekly Learner Workload
Independent Learning Independent learning 89 Per Semester 7.42
Directed Learning Directed e-learning 12 Per Semester 1.00
Tutorial Mentoring and small-group tutoring 12 Per Semester 1.00
Lecture Classroom and demonstrations 12 Per Semester 1.00
Total Weekly Contact Hours 3.00
Workload: Part Time
Workload Type Workload Description Hours Frequency Average Weekly Learner Workload
Lecture Classroom and demonstrations 24 Per Semester 2.00
Tutorial Mentoring and small-group tutoring 12 Per Semester 1.00
Independent Learning Independent learning 89 Per Semester 7.42
Total Weekly Contact Hours 3.00
 

Module Resources

Recommended Book Resources
  • Gerardus Blokdyk. (2021), Transaction Services A Complete Guide, 5STARCook, p.336.
  • Pavlo Sidelov. (2018), The World Of Digital Payments: Practical Course (FinTech)., p.450.
Supplementary Book Resources
  • Richard Cantillon,. Essai sur la Nature du Commerce en General.
  • John C Hull. (2022), ‘Option Futures and other Derivatives’.
  • Jake VanderPlas. (2016), ‘Python Data Science Handbook’.
Recommended Article/Paper Resources
  • Tanai Khiaonarong and Terry Goh ‘FinTech and Payments Regulation: Analytical Framework’ (2020).
  • Johannes Ehrentraud, Jermy Prenio, Codruta Boar, Mathilde Janfils and Aidan Lawson. Lawson ‘FinTech and payments: regulating digital payment services and e-money’ (2021).
  • Anjan V. Thakor,. ‘FinTech and Banking’ (2019).
Other Resources
Discussion Note: