Other Payment Systems

Question 1

What are the five main participants in the Check system?

Answer 1

Payor, Paying Bank, Correspondent Bank, Bank of First Deposit, and Payee

Question 2

What are the five main participants in the Card system?

Answer 2

Cardholder, Issuer, ATM/Payment Network, Acquirer, and Merchant

Question 3

What is the year the American Bankers Association (ABA) adopted a routing number policy?

Answer 3

1911

Question 4

What is the string of characters on the bottom of a check that includes the routing number and account number?

Answer 4

MICR (Magnetic ink character recognition) line

Question 5

What is Check clearing?

Answer 5

The path a check follows

Question 6

What is the process of debiting and crediting funds represented by a check?

Answer 6

Check collection

Question 7

Fedwire® Funds Service uses what type of system to settle interbank funds transactions such as federal funds purchases, corporate payments, and other large-value payments?

Answer 7

Real-time gross settlement

Question 8

What is a multi-party network with intermediaries connecting and managing the flow of funds between Cardholders and Merchants?

Answer 8

Open loop network

Question 9

Payment services are provided directly to Merchants and Cardholders by the owner of the network without involving third-party financial institutions as intermediaries is called what?

Answer 9

Closed loop network

Question 10

Online debit card transaction are also known as what?

Answer 10

PIN-based or single message transaction

Question 11

Offline debit card transaction are also known as what?

Answer 11

Signature-based or dual message transaction

Question 12

What is the instant payments platform operated by The Clearing House?

Answer 12

RTP®

Question 13

What are the three RTP® status messages?

Answer 13

Accepted
Rejected
Accepted and not posted

Question 14

What is the Federal Reserve’s payment service that allows transactions to be sent 24/7 called?

Answer 14

FedNow® Service or FedNow®

Question 15

What are the types of FedNow® participation?

Answer 15

Customer Credit Transfer
Liquidity Management Transfer
Settlement Only

Question 16

What is a transit check?

Answer 16

A check that must be sent to another depository institution for collection

Question 17

What is settlement is done individually for each transfer, rather than processing by batch called?

Answer 17

Gross settlement

Question 18

Which card transactions are eligible for fraud or unauthorized chargeback?

Answer 18

Signature-based card transactions

Question 19

What type of check MUST be sent to another depository institution for collection?

Answer 19

Transit check

Question 20

Which wire system participant receives the funds?

Answer 20

Beneficiary

Question 21

What is a debit card payment requiring a PIN and traveling over one of the ATM/POS networks is also known as?

Answer 21

Online debit

Question 22

What is debit card payment requiring a customer signature and traveling over a credit card network is also known as?

Answer 22

Offline debit

Question 23

Which payments are final and irrevocable?

Answer 23

Wire, RTP®, and FedNow®

Question 24

Which participant authorizes, clears, and settles a debit transaction between an Acquirer and Issuer?

Answer 24

An ATM/POS Network

Question 25

List the three main type of cards and what they access.

Answer 25

1. Credit cards access a lending product
2. Debit cards access a DDA / checking account
3. Prepaid/stored value cards access a stored balance that is not associated with the Cardholder’s account