Financial Transactions Processing, Reserve, and Clearinghouse Activities
Description
This industry comprises establishments primarily engaged in providing one or more of the following: (1) financial transaction processing (except central bank); (2) reserve and liquidity services (except central bank); and/or (3) check or other financial instrument clearinghouse services (except central bank). Illustrative Examples: Automated clearinghouses, bank or check (except central bank) Credit card processing services Check clearing services (except central bank) Electronic funds transfer services, including peer-to-peer payment services
Hierarchy
| Code | Title | Description |
|---|---|---|
| 52 | Finance and Insurance 2-digit sector | The Sector as a Whole The Finance and Insurance sector comprises establishments primarily engaged in financial transactions (transactions involving the creation, liquidation, or change in ownership of financial assets) and/or in facilitating financial transactions. Three principal types of activities are identified: 1. Raising funds by taking deposits and/or issuing securities and, in the process, incurring liabilities. Establishments engaged in this activity use raised funds to acquire financial assets by making loans and/or purchasing securities. Putting themselves at risk, they channel funds from lenders to borrowers and transform or repackage the funds with respect to maturity, scale, and risk. This activity is known as financial intermediation. 2. Pooling of risk by underwriting insurance and annuities. Establishments engaged in this activity collect fees, insurance premiums, or annuity considerations; build up reserves; invest those reserves; and make contractual payments. Fees are based on the expected incidence of the insured risk and the expected return on investment. 3. Providing specialized services facilitating or supporting financial intermediation, insurance, and employee benefit programs. In addition, monetary authorities charged with monetary control are included in this sector. The subsectors, industry groups, and industries within the Finance and Insurance sector are defined on the basis of their unique production processes. As with all industries, the production processes are distinguished by their use of specialized human resources and specialized physical capital. In addition, the way in which these establishments acquire and allocate financial capital, their source of funds, and the use of those funds provides a third basis for distinguishing characteristics of the production process. For instance, the production process in raising funds through deposit-taking is different from the process of raising funds in bond or money markets. The process of making loans to individuals also requires different production processes than does the creation of investment pools or the underwriting of securities. Most of the Finance and Insurance subsectors contain one or more industry groups of (1) intermediaries with similar patterns of raising and using funds and (2) establishments engaged in activities that facilitate, or are otherwise related to, that type of financial or insurance intermediation. Industries within this sector are defined in terms of activities for which a production process can be specified, and many of these activities are not exclusive to a particular type of financial institution. To deal with the varied activities taking place within existing financial institutions, the approach is to split these institutions into components performing specialized services. This requires defining the units engaged in providing those services and developing procedures that allow for their delineation. These units are the equivalents for finance and insurance of the establishments defined for other industries. The output of many financial services, as well as the inputs and the processes by which they are combined, cannot be observed at a single location and can only be defined at a higher level of the organizational structure of the enterprise. Additionally, a number of independent activities that represent separate and distinct production processes may take place at a single location belonging to a multilocation financial firm. Activities are more likely to be homogeneous with respect to production characteristics than are locations, at least in financial services. The classification defines activities broadly enough that it can be used both by those classifying by location and by those employing a more top-down approach to the delineation of the establishment. Establishments engaged in activities that facilitate, or are otherwise related to, the various types of intermediation are included in multiple subsectors, rather than in a separate subsector dedicated to services alone, because these services are performed by intermediaries, as well as by specialist establishments, and the extent to which the activity of the intermediaries can be separately identified is not clear. Financial industries are extensive users of electronic means for facilitating the verification of financial balances, authorizing transactions, transferring funds to and from transactors' accounts, notifying banks (or credit card issuers) of the individual transactions, and providing daily summaries. Since these transaction processing activities are integral to the production of finance and insurance services, establishments that principally provide a financial transaction processing service are classified in this sector, rather than in the data processing industry in the Information sector. Legal entities that hold portfolios of assets on behalf of others are significant and data on them are required for a variety of purposes. Thus, for NAICS, these funds, trusts, and other financial vehicles are the fifth subsector of the Finance and Insurance sector. These entities earn interest, dividends, and other property income, but have little or no employment and no revenue from the sale of services. Separate establishments and employees devoted to the management of funds are classified in Industry Group 5239, Other Financial Investment Activities. |
| 522 | Credit Intermediation and Related Activities 3-digit subsector | Industries in the Credit Intermediation and Related Activities subsector group establishments that (1) lend funds raised from depositors; (2) lend funds raised from credit market borrowing; or (3) facilitate the lending of funds or issuance of credit by engaging in such activities as mortgage and loan brokerage, clearinghouse and reserve services, and check cashing services. |
| 5223 | Activities Related to Credit Intermediation 4-digit industry group | This industry group comprises establishments primarily engaged in facilitating credit intermediation by performing activities, such as arranging loans by bringing borrowers and lenders together and clearing checks and credit card transactions. |
| 52232 | Financial Transactions Processing, Reserve, and Clearinghouse Activities 5-digit NAICS industry | See industry description for 522320. |
| 522320 | Financial Transactions Processing, Reserve, and Clearinghouse Activities 6-digit U.S. detail | This industry comprises establishments primarily engaged in providing one or more of the following: (1) financial transaction processing (except central bank); (2) reserve and liquidity services (except central bank); and/or (3) check or other financial instrument clearinghouse services (except central bank). Illustrative Examples: Automated clearinghouses, bank or check (except central bank) Credit card processing services Check clearing services (except central bank) Electronic funds transfer services, including peer-to-peer payment services |
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Classification References
- 01Establishments primarily engaged in nonfinancial data and electronic transaction processing (except payroll processing services) are classified in Industry 518210, Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services;
- 02Establishments primarily engaged in providing payroll processing services are classified in U.S. Industry 541214, Payroll Services;
- 03Establishments of the central bank primarily engaged in check clearing and other financial transaction processing are classified in Industry 521110, Monetary Authorities-Central Bank;
- 04Establishments primarily engaged in credit card issuing and related financial transaction processing are classified in Industry 522210, Credit Card Issuing;
- 05Establishment primarily engaged in furnishing physical or electronic marketplaces for the purpose of facilitating the buying and selling of securities and commodities are classified in Industry 523210, Securities and Commodity Exchanges; and
- 06Establishments primarily engaged in operating commodity or securities exchange clearinghouses are classified in U.S. Industry 523999, Miscellaneous Financial Investment Activities.
Index Items
Automated clearinghouses, bank or check (except central bank)
Automated Teller Machine (ATM) or Automated Loan Machine (ALM) network operation
Bank clearinghouse associations
Central reserve financial institutions (except central bank)
Check clearing services (except central banks)
Check clearinghouse services (except central banks)
Check validation services
Clearinghouses, bank or check
Credit card processing services
Electronic financial payment services
Electronic funds transfer services, including peer-to-peer payment services
Financial transactions processing (except central bank)
Processing financial transactions
Reserve and liquidity services (except central bank)
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External Resources
Census.gov NAICS Detail
Official US Census Bureau definition and scope for NAICS 522320.
Federal Reserve Board
Official government page providing educational resources on how the Federal Reserve operates the banking and payment clearing system.
National Society of Payment Professionals
Industry trade association representing payment networks, clearing houses, and other financial transaction processors.
American Bankers Association - Payment Systems
Directory and resource hub from the major banking trade association focusing on payment infrastructure and clearing mechanisms.
