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Finance · Payments

Credit (Payments and Account Entries)

Reference entry · last updated 20260910

A credit to a customer’s deposit account increases the amount recorded as owed to that customer. A credit transfer is a payment initiated by the payer to credit a payee’s account.[1][2]

1. First principles: account entries

A bank records customer deposits as liabilities.[2] Crediting that liability increases the customer’s deposit balance; debiting it decreases the balance. In general bookkeeping, the effect of a debit or credit depends on the account type and whose books are being described.[1]

Illustrative example: a recipient with a ₱2,000 deposit balance receives a ₱500 transfer. A ₱500 credit brings that balance to ₱2,500, assuming no other entries.

2. Credit transfers

The payer starts a credit transfer by instructing its institution to send funds.[2] The same transfer can debit the sender’s account and credit the recipient’s account. InstaPay and PESONet use credit-transfer arrangements.[3][4]

“Credit” in this payment description identifies an account entry or transfer direction. It does not establish that either customer has borrowed money.

3. Customer credit and settlement

A customer credit and interbank settlement concern different accounts. InstaPay credits the recipient’s account, while participants settle net obligations through accounts at BSP.[3]

4. See also

5. References

  1. OpenStax. Principles of Financial Accounting, §3.5.
  2. European Central Bank. Glossary: credit transfer and commercial bank money.
  3. BSP. InstaPay FAQ.
  4. BSP. PESONet three multilateral batch settlement cycles: FAQs (20240827).