The word “giro”, which is used to describe money transfer operations, is derived from the Greek word for circle. Giro denotes the cyclic operation involved in the transfer of credit balances from one bank account into another. On the Continent such systems have been used successfully for a considerable period of time as an alternative to payment of accounts by cheques. Even in the United Kingdom, where payment of cheques has been predominant for a considerable period of time, the money transfer system is no novelty. In an elementary form it has been operable for a long time by means of individual letters in which customers instructed their banks to pay given amounts of money to the credit of designated payees. As a fully operative system providing an alternative to the settlement of accounts by cheques, the bank giro came into operation in the 1960s in the wake of the introduction of the national giro, operated by the Post Office.2 At present the bank giro and the National Girobank are linked so that an amount can be transferred from an account maintained with a clearing bank to an account maintained with the National Girobank, and vice versa. Most of the banks involved in current account transactions in the U.K. participate in the bank giro.

Both the national giro and the bank giro are money transfer systems which operate either on the basis of a written instruction or, in some cases, on the basis of orders encoded on a tape. Another development is the introduction of plastic tokens, known as “cash point cards”, which are used to obtain cash from an automatic teller machine or in order to carry out other transactions keyed into the computer terminal of the computer. These tokens are not the subject of this paper.

In the case of giro transactions, a uniform set of forms is used throughout the entire banking system. Four main variants are employed: individual money transfer forms (known as “bank giro credits”), standing orders, traders’ orders and direct debits. However, one basic method of transfer is operable in all giro transactions. A specific terminology is required so as to avoid confusion between the roles of the different parties in giro transfers and in the clearing of cheques.

In a giro operation, the person who wishes to effect payment—the payor—instructs his bank (the “transferring bank”) to pay a specified amount to the credit of a designated account, maintained either in the payor’s own name or, more usually, in the