QUICK DEFINITION
Payment versus Payment — A settlement mechanism linking the two currency legs of an FX transaction so one is settled only if the other is.
WHY IT MATTERS
Why Payment versus Payment matters in finance
It reduces principal settlement risk in foreign-exchange markets.
FINANCIAL SYSTEM CONTEXT
← Back to the Financial Security GlossarySecurity is also a market-infrastructure question
In financial services, payment versus payment should be understood in relation to operational continuity, data integrity, payments, market infrastructure and interconnected dependencies. A control can be technically effective while still leaving material resilience risk if critical services cannot continue or recover during disruption.