Glossary

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P

PAN

The Primary Account Number - also known as the payment card number - is a sequence of digits that serves as a unique identifier of a card, whether physical or virtual. The sequence is not random: it combines the set of numbers that identify the payment circuit (e.g. Bancomat or VISA), the issuer (the intermediary that issued the card to the cardholder) and the cardholder. The PAN is used to carry out transactions: when payments are made or cash is withdrawn, the POS (Point of Sale) or ATM (Automated Teller Machine) reads the PAN and transmits it to the issuing bank's authorization centre. The bank then conducts validity checks before authorizing the transaction.

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).
PARIS AGREEMENT

The Paris Agreement is a legally binding international treaty on climate change under the (United Nations Framework Convention on Climate Change - UNFCCC). It was adopted by 196 Parties at the UN Climate Change Conference (COP21) in Paris, France, on 12 December 2015. It entered into force on 4 November 2016. The signatory States committed to holding the increase in global average temperature below 2°C above pre-industrial levels and to pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.

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

A current account works as a 'payment account' when used for payment services. Payment accounts, unlike current accounts, can also be managed by operators other than banks, such as the post office, electronic money institutions (EMIs) and payment institutions (PIs).

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 INSTITUTION (PI)

An intermediary authorized to provide payment services. PIs are subject to a regulatory and supervisory regime comparable to that in force for the other supervised intermediaries (in terms of licensing and capital requirements, as well as of organizational safeguards).

PAYMENT SERVICE PROVIDER (PSP)

An entity authorized to offer 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. 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.

PENSION

Permanent or temporary income that the State or social security bodies institutions provide to public or private sector workers or to their family or reversioners.

The income refers to a previous employment period, generally starting from the retirement age, or else following events that provoked either a worker''s death or a condition of severe physical or mental impairment.

The basic pension is provided through the National Institute for Social Security (INPS) and through specific schemes for some professions.

The supplementary pension is provided through pension funds and it complements (though it is not a substitute for) the compulsory basic pension. The supplementary pension can be accessed upon reaching retirement age, provided one has payed paid into a supplementary pension fund for at least five years.

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.

PERSONAL LOAN

Personal loans are usually granted to meet unspecified needs for liquidity. The lender provides the consumer with the sum in full and the consumer repays it in instalments. In order to protect themselves from the risk of repayment failure, the lender may demand that the loan be secured by personal guarantees, such as a surety and/or an insurance policy.

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.

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, 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).