This article explains how large-value payment systems work, using either gross or net
settlement. The author discusses risk control in a real-time gross settlement system and
analyzes the pricing of credit to provide intraday liquidity. She argues for distinguishing
between consumption/investment debt and payment debt. A theoretical model suggests that,
under the assumption that there are no opportunities for intraday optimization of consumption
and production, the risk-free rate on intraday payment credit should be zero. This is because
the cost of intraday liquidity is a transaction cost of the underlying goods/assets trade and,
thus, should be minimized.