Salary Payment Systems Around the World

In today’s globalized economy, it’s essential for businesses to have an understanding of the different salary payment systems used around the world. 

Whether you’re a company operating in multiple countries or an individual looking to work overseas, knowing the payment systems used in different regions is crucial.

In this blog post, we’ll take a look at the different salary payment systems used in Europe, North America, Asia, South America, and Africa, and explore the cultural differences that affect these systems.



In Europe, the most common salary payment system is bank transfer. Employees in the UK, for example, are usually paid by bank transfer, which is a secure and efficient way of transferring funds. In Germany, companies are required to pay employees via bank transfer, which is often done at the end of each month.

In France, it’s common for employees to be paid monthly, and the payment is usually made by bank transfer. However, some companies may also offer paper checks or cash payments. In general, European countries tend to have more regulations around payroll management than in North America.

Electronic payment systems for salary payments in Europe include

BACS (Banker’s Automated Clearing Services): Used primarily in the UK, BACS processes transactions in batches and takes a few business days for the transaction to complete. It’s typically used for direct deposit of salaries, pensions, state benefits and tax credits, as well as for regular payments such as utility bills.

CHAPS (Clearing House Automated Payment System): Also a UK system, CHAPS provides same-day fund transfers and is primarily used for high-value transactions.

SEPA (Single Euro Payments Area): SEPA enables euro-denominated payments between accounts in the 34 SEPA countries, which includes 27 EU member states along with some other countries. It is used for credit transfers (like wire transfers), direct debits, and card payments.

SWIFT (Society for Worldwide Interbank Financial Telecommunication): A global messaging network that financial institutions use to securely transmit information and instructions through a standardized system of codes. SWIFT does not actually transfer funds, but sends payment orders that must be settled by correspondent accounts that the institutions have with each other.

TARGET2 (Trans-European Automated Real-time Gross Settlement Express Transfer system): The real-time gross settlement (RTGS) system for the Eurozone, used for high-value transfers between banks.

EPS (Electronic Payment Standard): An online transfer system developed by several Austrian banks. This makes it possible to shop online and pay directly via the online banking of the bank or savings bank.

iDEAL: An e-commerce payment system in the Netherlands, based on online banking. Introduced in 2005, this product allows customers to buy on the Internet using direct online transfers from their bank account.

PayPal: An American company operating a worldwide online payments system that supports online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders.

SOFORT Banking: An online direct payment method and operates based on online banking. It’s popular in countries such as Germany, Austria, Switzerland, and Belgium.

Giropay: An Internet payment system in Germany that allows direct debit transfers from about 1,500 German banks.

Please note that not all methods may be available in all European countries, and different banks and institutions may have their own systems in place. As always, consult with a bank or financial institution for specific information and options.


North America

In North America, the most common salary payment system is direct deposit. In the United States, most employees are paid via direct deposit into a bank account. This method is also used in Canada, where the majority of workers receive their salary via direct deposit. Some companies may also offer payment via paper checks, but this is becoming increasingly rare.

In the US, there are also some unique features to the payroll system, such as the use of pay stubs. Pay stubs are documents that show an employee’s earnings, deductions, and net pay. They’re usually issued every pay period, and employees can use them to keep track of their salary and ensure they’re being paid correctly.

Electronic payment systems for salary payments in North America include:

ACH (Automated Clearing House): Similar to BACS, ACH is an electronic network used in the United States for financial transactions. It processes large volumes of credit and debit transactions in batches, including direct deposit payroll payments, vendor payments, and electronic bills.

Wire Transfers: Comparable to CHAPS, wire transfers are a method of electronic funds transfer from one person or institution to another. Wire transfers may be more expensive and are typically used for large transactions or when a more immediate transfer is needed.

Direct Deposit: This method is used by employers to electronically transfer wages into employees’ bank accounts.

EFT (Electronic Funds Transfer): This is a general term for transferring money between accounts electronically, and can include methods such as wire transfers and direct deposits.

Real-Time Payments (RTP): RTP is a newer system in the United States that provides immediate, 24/7 interbank electronic payments, much faster than traditional ACH transactions.

Zelle: Backed by many major US banks, Zelle is a peer-to-peer payment service that allows for quick transfers between participating bank accounts.



In Asia, the most common salary payment system varies depending on the country. In Japan, for example, it’s common for employees to be paid twice a month. The payment is usually made by bank transfer, but some companies may also offer cash or check payments.

In China, the most common payment method is bank transfer, but some companies may also pay employees in cash. India also uses bank transfer as the primary payment method, although cash payments are still common in some sectors.

Electronic payment systems used to pay salaries in Asia include:

CNAPS (China National Advanced Payments System): Operated by the People’s Bank of China, CNAPS allows for real-time settlement of large-value payments in China, similar to CHAPS in the UK.

BEA (The Bankers Association of the Republic of China): This interbank network allows for electronic fund transfers in Taiwan. It is used for both large-value transactions (like CHAPS) and for smaller, batch-processed transactions (like BACS).

NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement): These are electronic funds transfer systems in India. NEFT operates on a deferred net settlement basis, similar to BACS, while RTGS is for high-value transactions that need immediate clearing, similar to CHAPS.

Zengin System: This is the primary electronic funds transfer service used in Japan, for both batch-processed and real-time transactions.

IBG (Interbank GIRO): In Malaysia, the IBG system is used for electronic funds transfers.

FAST (Fast and Secure Transfers): In Singapore, FAST allows for near-instantaneous fund transfers between accounts at different banks, operating similarly to CHAPS.

PromptPay: In Thailand, this government-backed system allows for easy, low-cost fund transfers and can be used for both small and large transactions.

AliPay and WeChat Pay: These are mobile payment apps that are incredibly popular in China. While not exactly alternatives to BACS or CHAPS, these systems have largely replaced cash and cards in China.

GoPay, OVO, and Dana: These are examples of digital wallets widely used in Indonesia for various types of payments.

UPI (Unified Payments Interface): In India, UPI allows for real-time payment transactions between banks through mobile platforms.


South America

The most common salary payment system in South America is also bank transfer. In Brazil, for example, most employees are paid by bank transfer, and this payment method is becoming increasingly popular in other countries such as Argentina. However, cash payments are still common in some sectors, particularly in smaller businesses.

South America has a diverse range of electronic payment systems due to its many individual countries and financial environments. Similar to other regions, South American countries use various systems for transferring money electronically between bank accounts. 

Electronic payment systems used to pay salaries in South America include:

SPEI (Sistema de Pagos Electrónicos Interbancarios): This system in Mexico enables electronic money transfers that are generally completed on the same day, making it similar to CHAPS.

PIX: Launched by the Central Bank of Brazil in 2020, PIX enables instant payments 24/7, similar to CHAPS.

TEF (Transferencia Electrónica de Fondos): This electronic funds transfer system is used in Argentina for both large-value and smaller, batch-processed transactions, making it similar to both BACS and CHAPS.

CUD (Cámara de Compensación Electrónica): In Peru, the CUD enables electronic clearing of payments.

PSE (Pagos Seguros en Línea): This online payment method in Colombia allows customers to make payments on the internet debiting funds directly from their bank accounts.

PagoEfectivo: This is a popular payment method in Peru that allows users to pay online and then confirm their payment at an ATM or bank branch.

MercadoPago: This is a digital payment platform available across Latin America. It supports payments via credit and debit cards, bank transfers, and payments at physical locations.

PayU: This is a leading financial services provider in global growth markets. PayU provides service in several South American countries including Argentina, Brazil, Chile, Colombia, Mexico, Panama, and Peru.



In Africa, the most common payment system varies widely depending on the country. In South Africa, for example, bank transfer is the most common payment method, although cash payments are still used in some sectors. In Nigeria, the most common payment method is cash, although bank transfers are also used in some companies.

Africa is a diverse continent with many countries, each with its own financial infrastructure and methods of electronic payment.

Electronic payment systems used to pay salaries in Africa include:

EFT (Electronic Funds Transfer): Similar to other continents, EFT is used in many African countries for transferring money between bank accounts. This can be for both batch-processed, non-urgent transactions (like BACS) and for more immediate, high-value transactions (like CHAPS).

RTGS (Real Time Gross Settlement) Systems: Several African countries have their own RTGS systems for high-value, time-critical money transfers, similar to CHAPS. These include the Ghana Interbank Payment and Settlement Systems (GhIPSS), the Kenya Electronic Payment and Settlement System (KEPSS), and the South African Multiple Option Settlement (SAMOS) system.

M-Pesa: Originally launched in Kenya, M-Pesa is a mobile phone-based money transfer, financing, and microfinancing service. While not exactly equivalent to BACS or CHAPS, it has revolutionized electronic payments in several African countries where traditional banking infrastructure is less widespread.

Paystack and Flutterwave: These are examples of digital payment platforms that facilitate transactions between businesses and their customers. They are popular in countries like Nigeria and South Africa.

EcoCash: This is a mobile payment service used in Zimbabwe. It allows users to deposit, withdraw, and transfer money easily.

Airtel Money: This is a mobile money transfer service available in several countries in Africa, allowing customers to send and receive money, top-up airtime, make bill payments, and carry out other financial transactions on their mobile phones.

Zoona: This is used in Zambia and Malawi for money transfers.

Cellulant: This is a digital payments platform that enables seamless transactions between businesses and their customers across Africa.


Differences between Salary Payment Systems in Different Regions

One of the main differences between salary payment systems in different regions is the level of regulation. In Europe, for example, there are often more regulations around payroll management, including requirements around payment methods, pay stubs, and other documentation. In North America, there tends to be less regulation around payroll, which allows for more flexibility in payment methods.

Cultural differences also play a role in salary payment systems. In some countries, cash payments are still common, particularly in smaller businesses. In other regions, bank transfers are the preferred payment method due to their security and efficiency. Additionally, some countries may have cultural preferences for certain payment methods, such as monthly payments or pay stubs.

In conclusion, understanding the different salary payment systems used around the world is essential for any business operating in multiple countries or for individuals looking to work overseas. 



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