Glossary

P

PANEL

The ABF (Banking and Financial Ombudsman) is divided into seven territorial Panels. The composition of the panels ensures that the interests of all parties involved are represented.

Each panel is composed of five members:

• the chair and two members are selected by the Bank of Italy;
• one member is selected by the associations representing financial intermediaries;
• one member is selected by the associations representing customers (businesses and consumers).

PAST-DUE MORE THAN 90 DAYS

Loans that are overdue and have not been paid for more than 90 days or loans on which the borrower has drawn more than the amount granted by the bank for a period exceeding 90 days.

PAYMENT ACCOUNT WITH BASIC FEATURES

This is account is for individuals with limited financial resources and is offered to all consumers in order to provide access to essential banking services.

It only offers certain services:

• cash withdrawal
• debit card
• direct deposit of pension or salary payments
• deposit of cash, personal cheques or banker's drafts
• automatic bill payment

Payment card circuit

These circuits have a set of rules and procedures that allow you to use your card to make payments (through POS machines in stores) or to withdraw money from or make payments at ATMs (by connecting to a financial intermediary or bank). Cards (debit, credit or prepaid) can be linked to one or more payment circuits, identifiable by the logo printed on the card itself. The most well-known debit card circuits in Italy are Maestro and Bancomat, while the credit card circuits are Visa and MasterCard.

PAYMENT SERVICE PROVIDER (PSP)

An entity authorized to offer payment accounts (see Payment accounts), specifically, banks, Poste Italiane (Bancoposta), payment institutions and electronic money institutions.

PAYMENT SYSTEMS

The set of instruments, procedures and circuits for the settlement of cash and securities transactions which facilitates the transfer of money. The Bank of Italy offers payment services in the European and Italian payment systems, thereby helping to ensure the proper functioning of the economic system, financial stability, and market efficiency and integration (see Markets). Even the implementation of monetary policy is based on the existence of a reliable and efficient payment infrastructure.

PAYMENTS

A payment is the transfer of a sum of money as compensation for a service or as a means of extinguishing an obligation: payments can be made in cash or using alternative payment instruments, such as cheques, payment cards and bank transfers.

PERSONAL CHEQUE

A customer can order a bank to pay an amount of money to a third party or to oneself using a personal cheque. The bank usually provides the customer with a book of cheques stamped with the words 'non transferable'. If customers do not want there to be a restriction on transferability, they must specifically request that the words 'non transferable' not appear and pay a fee of €1.50 per cheque as required by law.

PHELPS

Edmund S. Phelps won the Nobel Prize in Economics in 2006 for his analysis of intertemporal tradeoffs in macroeconomic policy.

PHISHING

Illegal activity aimed at acquiring sensitive or confidential data from individuals (e.g. credit card number, bank account details, passwords, identity documents, etc.), in order to obtain credit lines or perform other transactions (e.g. purchases) under false identity. The information is acquired by illegal organizations generally via the internet, contacting the legitimate owners, including through the falsification and use of the trademarks, logos and email addresses of large financial institutions.

PHONE BANKING

This is a service that allows you to carry out operations - such as credit transfers and other payments like phone top-ups or bills - without going into a bank, by calling the bank's call centre. Many banks have a toll-free number for customers to use.

PISP - Payment Initiation Service Provider

A service provided by a specialized payment institution that makes it possible to make a payment order via a money transfer on an e-commerce platform.

POINT OF SALE (POS)

A point-of-sale terminal is a device used by merchants to process payments using credit, debit and prepaid cards. The POS terminal is linked to the processing centre of the bank or other payment institution that offers the service so that the payment can be authorized and the relative amount debited to the buyer and credited to the seller’s account. There are also virtual POS terminals that make it possible to manage online payments by inputting card data through a dedicated internet page.

POLICY

To protect themselves from the risk of non-payment, lenders can require that a borrower take out an insurance policy. The law requires that loans against one fifth of salary or pension be backed by an insurance policy to cover the risk of the debtor's death and/or loss of employment.

PORTABILITY

With regard to a mortgage, portability is an operation that enables the borrower to pay off their mortgage by signing a new loan agreement with another lender for an amount equal to the outstanding mortgage, without the original lender’s consent being necessary. By law, the settlement of the old loan and granting of the new loan are entirely free of charge.

For consumers with current accounts, portability, or switching, refers to when a customer transfers the positive balance and recurring payment services (for example, automatic payments of utility bills and mortgage instalments payments, automatic deposits of salaries and pension payments, etc.) from an account at one bank to another account at another bank. It is not difficult to do: for consumers, the law says that switching should take no more than 12 working days to complete and be done for free.

For more information, you can consult the Bank of Italy’s website: Services for the public/Basic information/Switching services between bank accounts.

PORTFOLIO

In finance, this term refers to the set of financial instruments and investment assets in which one's savings are invested.

POSTAL ACCOUNT

An account opened with Poste Italiane for saving and for making payments.

POWER TO EXTINGUISH A DEBT

This is a characteristic of coins and banknotes that is conferred by law. It means that the buyer, by using coins and banknotes, i.e. cash, to make payment frees himself or herself of any payment obligation towards the seller.

PREPAID CARD

A payment instrument on which the cardholder loads a sum, which is an amount prepaid to the issuer; each time it is used to make a payment or withdraw cash, the amount of the transaction is deducted from the card balance.

Cardholders often choose prepaid card to make purchases over the Internet because, in the event of fraud, only the amount still credited to the card is at risk.

Cards that can be used with a wide range of merchants (general-purpose or open-system cards) are issued by banks, e-money institutions (EMIs), Poste Italiane and, to the extent permissible under the applicable law, by central, regional and local governments.

The maximum amount that can be loaded onto a reloadable prepaid card varies from issuer to issuer; cards can be reloaded multiple times. A recent addition to the types of prepaid cards on offer – especially attractive to young people due to the options it offers at low costs – is the 'account card' with IBAN, which incorporates some of the features of payment accounts (see Payment account), such as sending and receiving credit transfers.

Cards issued by providers of goods and services (for example, prepaid calling cards) are not considered electronic money and can be used solely to pay for purchases with the card’s issuer ('closed-system prepaid card').

PRICE STABILITY

Price stability is defined as low inflation, i.e. very contained variations in the level of consumer prices. Price stability is the primary objective of the central banks in the euro area (Eurosystem); it is a fundamentally important goal for the other main central banks as well. The ECB Governing Council has defined it as a year-on-year increase in consumer prices (as measured by the HICP) for the euro area that is below but close to 2 per cent.

PRINCIPAL

In mortgage transactions the principal is the amount of capital initially requested in the form of a loan, which must be paid back to the bank along with the interest. The mortgage instalments comprise the principal amount, which is a fraction of the sum borrowed, and an interest portion, which is given by the distribution of the interest rate applied to the loan spread over the duration of the loan.

PRIVACY

Privacy is another way of saying confidentiality. The protection of personal data is a fundamental right under Article 8 of the Charter of Fundamental Rights of the European Union. 'Personal data' is any information that identifies or makes identifiable, directly or indirectly, a natural person and that can provide information on his or her characteristics, life style, personal relationships, health status, financial status, and so forth.

Of particular importance are:

• data that make it possible to identify the person directly - such as vital statistics (for example, first and last name), images, etc. - and data that make it possible to identify the person indirectly, such as an identification number (for example, taxpayer ID number, IP address, license plate number);
• special categories of data: 'sensitive data', that is data that reveals a person's racial or ethnic origin, religious or philosophical beliefs, political opinions, trade union membership, health or sex life. Regulation (EU) 2016/679 (Article 9) also included the notions of genetic data, biometric data and sexual orientation;
• data relating to criminal convictions and offences: 'legal', that is, data that can reveal the existence of certain legal proceedings entered in the criminal records (for example, definitive criminal convictions, conditional release, residency prohibition or obligation, measures as an alternative to detention) or whether a person is suspected or accused of committing a crime. Regulation (EU) 2016/679 (Article 10) covers data relating to criminal convictions and offences or related security measures.

With the revolution of new technologies, other personal data has become important, such as that relating to electronic communication (via the internet or telephone) and that enabling geolocalization, providing information on places visited and movements.

For further information, visit the site of the Italian Data Protection Authority.

The personal data in the Central Credit Register are obtained by the Bank of Italy without the consent of the customer since the database is managed in the public interest. For more information on the protection of personal data, please consult the dedicated information sheet on the Bank of Italy's website at Servizi al cittadino/Accesso ai dati della CR/ Informativa privacy (only in Italian).