Classifications of Payment System less the value of all payments sent. If the differ- ence is positive, the participant is in a "net credit position," and will receive the net amount. If the difference is negative, the participant is in a "net debit position" and should pay the net amount. An arrangement, in which a net position is calculated between two parties, is called "bilateral netting." Meanwhile, an arrangement, in which a net position is calculated between a participant and the rest of the participants in the payment system, is called "multilateral netting." The net credit or debit position at the settlement time is called the "net settlement position." A classic example of this system is to make a settlement only one time at the end of the busi- ness day. This is called the "end-of-day settlement system." In the end-of-day settlement system, the net settlement positions are settled from the net debtors to the net creditors. This is to say, the end-of-day settlement system is usually operated in conjunction with the net settlement system. Real-Time Settlement System "Real-Time Settlement System" is a payment system in which settlement is made immediately in real-time. This means that the processing of payment order is carried out at the time when the system receives it rather than at some later time. In a Real-time Settlement System, settlement is made individually at real-time during the operat- ing hours of the system. Gross Settlement System "Gross Settlement System" is a payment system in which the settlement of funds occurs individu- ally on a gross basis. In this system, no netting is made and settlement is made on the instruction value (gross value) of each payment instruction in the order of arrival. Continuous Settlement System "Continuous Settlement System" is a payment system in which settlement is made continuously when a payment order meets the condition for settlement. Different from a Real-Time Payment System, payment orders go into the checking process before the settlement process. When and only when a payment order satisfies the settlement condition, the payment order is processed for settlement. To take one example of a settlement condition, the balance of the related accounts should be positive (above zero) and below the upper limit after the processing of the payment order. The processing could be gross settlement or net settlement, depending on the settlement mechanism. The Continuous Settlement System falls into an intermediate category between the Desig- nated-Time Settlement System and Real-Time Settlement System. If a payment order passes the settlement condition immediately, the order is processed in no time. In this case, the continu- ous settlement system is more like the Real-Time FREQUENCY AND TIMING OF SETTLEMENT Payment systems fall into three categories on the basis of frequency and timing of settlement: the "designated-time settlement system," "real-time settlement system" and "continuous settlement system". In the first system, settlement is made only at a certain time. In the second system, settlement is made in real-time when the system receives the payment order. In the third system, settlement is made continuously when a payment order meets the condition for settlement. Designated-Time Settlement System "Designated-Time Settlement System" is a pay- ment system in which settlement is made only at a designated-time, one time or several times in a day. 13