SWIFT, a global provider of financial messaging services, has inked a  Memorandum of Understanding (MOU)  Memorandum of Understanding (MOU) A memorandum of understanding (MOU) is defined as a nonbinding agreement between two or more parties that outlines the terms and details of an understanding. This includes each parties’ overall requirements and responsibilities. An MOU is seen as the first stage in the formation of a formal contract between two or more parties. These contracts are used throughout many industries, between companies, authorities, regulators, and individuals.At its core, an MOU is not legally binding though is viewed as a serious document in the eyes of most authorities.An MOU is seen as an important step in any process given the level of time, energy and resources needed to draft an effective and fair document. This step forces participating parties to reach a semblance of a mutual understanding. An MOU helps all sides naturally mediate and figure out what is most important in moving toward an eventual future agreement that benefits both sides.Memorandums of Understanding (MOU) ExplainedIt is best to think of an MOU as a formal letter of intent, which is a nonbinding agreement stating a binding agreement will soon follow.MOUs are commonly used as part of international relations because, unlike treaties, they can be quickly crafted or signed, while also escaping public attention or scrutiny MOUs can also be used domestically and as a tool to modify existing treaties.These agreements do share some common similarities. As mentioned above, MOUs are not legally binding.While they do vary in complexity, each of these agreements ultimately reflect represents mutually accepted expectations between people, organizations or governments.Of note, MOUs do not involve the exchange of money or finances. A memorandum of understanding (MOU) is defined as a nonbinding agreement between two or more parties that outlines the terms and details of an understanding. This includes each parties’ overall requirements and responsibilities. An MOU is seen as the first stage in the formation of a formal contract between two or more parties. These contracts are used throughout many industries, between companies, authorities, regulators, and individuals.At its core, an MOU is not legally binding though is viewed as a serious document in the eyes of most authorities.An MOU is seen as an important step in any process given the level of time, energy and resources needed to draft an effective and fair document. This step forces participating parties to reach a semblance of a mutual understanding. An MOU helps all sides naturally mediate and figure out what is most important in moving toward an eventual future agreement that benefits both sides.Memorandums of Understanding (MOU) ExplainedIt is best to think of an MOU as a formal letter of intent, which is a nonbinding agreement stating a binding agreement will soon follow.MOUs are commonly used as part of international relations because, unlike treaties, they can be quickly crafted or signed, while also escaping public attention or scrutiny MOUs can also be used domestically and as a tool to modify existing treaties.These agreements do share some common similarities. As mentioned above, MOUs are not legally binding.While they do vary in complexity, each of these agreements ultimately reflect represents mutually accepted expectations between people, organizations or governments.Of note, MOUs do not involve the exchange of money or finances. Read this Term) with China’s Cross-border Interbank Payment System (CIPS), helping integrate China with the broader global SWIFT community, according to a SWIFT statement.

In particular, the MOU will aim to strengthen China’s overseas payment capabilities via SWIFT’s globally utilized infrastructure. The MOU was jointly signed last week between CIPS and SWIFT executives, including SWIFT’s Chief Executive of the Asia-Pacific region (APAC) and Europe, Middle East, and Africa (EMEA), Alain Raes.

During H2 2015, SWIFT’s global currency tracker showed a steady uptick in the utilization of the Chinese RMB for  Payments  Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term, which demonstrated the notion of the growing popularity of international payments in China. More recently, SWIFT embarked on a global initiative earlier this year, which helped enhance cross-border transactions via the leveraging of SWIFT’s messaging platform capabilities and global outreach – the initiative was supported by a membership of forty-five leading banks and investing institutions.

According to CIPS Executive Director Li Wei in a recent statement on the MOU: “China International Payment Service Corp. is looking forward to benefiting from SWIFT’s platform and services to provide an efficient and convenient channel to the global financial community.”

“We aim to provide an inclusive platform to capture cross-border RMB flows to all types of participants which will significantly extend the reach of RMB internationalization,” he added.

“SWIFT is a global messaging provider supporting more than 150 payment and settlement systems, and CIPS is a payment system. There are natural synergies between global financial messaging services, such as those provided by SWIFT, and payment systems. Working with such market infrastructures is at the heart of our business,” noted Mr. Raes in an accompanying statement.