基础 Flashcards
Clearing vs Settlement
clearing is doing the paperwork or diligence necessary to accurately complete a payment transaction
settlement is the actual movement of the funds.
In simple words, clearing is the process of determining the obligations – who owes what to whom, and settlement is the process of actually fulfilling those obligations.
ACH
ACH is a generic term that encompasses various forms of transferring funds electronically between two financial institutions, such as checks, echecks and recurring payments taken directly and electronically from checking or savings accounts.
Credit Card
Credit card transactions are just that; the transaction is made through the credit network of the issuing card. Credit cards are revolving debt instruments that enable individuals to use borrowed money to make purchases or payments.
ACH vs Credit Card
The single most significant difference between ACH processing and credit card transactions is guarantee of payment. Credit cards utilize a network (such as Visa and Mastercard) to verify whether somebody is within their credit limit and then, after the network approves the trade, those funds are guaranteed to the merchant. This is known as a “guaranteed funds” transaction.
ACH, by comparison, does not guarantee the funds. An ACH transaction is only a request for funds. The transactions are usually batched together and sent out for processing once a day. This can cause delays of several days to settle the transaction. ACH transactions can also be rejected for reasons such as Non-Sufficient Funds (NSF) or a closed account and the payment-acceptor will not know until several days later.
Card netword settlement funding is typically done through ACH transfers into your designated bank account, although wire transfers are not at all uncommon, especially in high-risk merchant accounts.
Routing number and account number
a routing number identifies the Bank to the Federal Reserve, and an account number identifies the customer’s account to the Bank
