Payment Systems (2) Flashcards
Originator
A company or individual that has been authorized by the Receiver to initiate either a credit or debit ACH entry to their account.
Receiver
An individual or company that has authorized an Originator to initiate an ACH entry to their account with the RDFI.
Originating Depository Financial Institution (ODFI)
A financial institution that receives payment instructions from Originators and forwards the entries to the ACH Operator.
Receiving Depository Financial Institution (RDFI)
A financial institution that receives ACH entries from the ACH Operator and posts the entries to the accounts of its depositors.
ACH Operator
The central clearing facility for ACH transactions.
Third-Party Service Provider
A third-party that processes ACH files and/or entries on behalf of financial institutions and/or Originators.
Third-Party Sender
A third-party that provides ACH services to the Originator, and, in that capacity, acts as an intermediary between the Originator and ODFI.
Card Issuer
An entity that issues a credit or debit card to the Cardholder.
Acquirer (Processor, Merchant Bank or Merchant Processor)
The financial institution that contracts with a merchant to initiate payment requests to a card association or company in the context of credit and debit card payments.
Cardholder
A person or entity that is issued a credit or debit account that is accessed using a card.
POS/ATM/Credit Card Network
Network which provides switching facilities for the routing of credit, debit and ATM card transactions between Acquirers and Card Issuers.
Paying Bank (Payor’s Depository Financial Institution)
Financial institution identified by the routing number encoded on the MICR line of a check.
Payee
The party to whom a check is made payable.
Bank of First Deposit (Payee’s Depository Financial Institution)
The first bank to which a check is deposited or transferred.
Payor (Check Writer, Maker or Drawer)
The party obligated to pay on a check.
Clearing House
A voluntary association of depository institutions that facilitate the clearing of checks or electronic items through the direct exchange of funds between members.
Correspondent Bank
Private depository institution, Bankers’ Bank or Federal Reserve Bank providing clearing or settlement services to a Paying Bank or Bank of First Deposit.
Truncating Bank
Financial institution that creates the image of the original check.
Reconverting Bank
Financial institution that produces the Substitute Check or Image Replacement Document (IRD).
Originator
Sender of the payment order in a funds or securities transfer.
Originating/Sender Bank
Financial institution that initiates a funds transfer on behalf of the Originator.
Federal Reserve Bank
Entity that processes and settles Fedwire Funds.
Beneficiary’s Bank
Financial institution identified in a funds transfer to be credited pursuant to the payment order.
Beneficiary
Person or entity to be paid in a funds transfer.
Pay Later
Type of retail processing where a card payment is expected after the goods or services have been received; typically refers to credit payments (e.g., credit card).
Pay Now
Type of retail processing where a card payment is expected when the goods or services are received; generally associated with debit payments (e.g., debit card).
Pay Before
Type of retail processing where a card payment is made for goods or services with prepaid or stored-value cards.
Remote Deposit Capture (RDC
Delivery system that enables paper checks to be processed remotely.
Remotely Created Check (RCC)
Check created by a Payee based on the account holder’s authorization that does not bear a signature.
Electronically Created Item (ECI)
A check that never appears in paper form.
Debit Entry
An entry to the record of an account to represent the transfer or removal of funds from the account.
Credit Entry
An entry to the record of an account that represents the transfer or placement of funds into the account.
Debit Card
A payment card issued to a person for purchasing goods and services through an electronic transfer of funds from a demand deposit account rather than using cash, checks or drafts at the point-of-sale.
Credit Card
A card indicating the holder has been granted a line of credit to make purchases or withdraw cash up to a prearranged ceiling.
Prepaid/Stored Value Card
A card-based payment system that assigns a value to the card; some cards can be “reloaded” through various methods and others are designed to be discarded.
Payroll Card Account
A bank account established directly or indirectly by an employer on behalf of an employee to which an employee’s wages are electronically transferred to.
SWIFT
Global network messaging service supporting correspondent banking and financial market utilities.
Financial Market Utilities (FMUs)
Multilateral systems that provide the infrastructure for transferring, clearing and settling payments, securities and other financial transactions among financial institutions or between financial institutions and the system.
Application Program Interface (API)
A set of specifications, standards or conventions that enable computer programs to exchange information.
Electronic Data Interchange (EDI)
Computer-to-computer exchange of business documents and payment-related information in a standard electronic format between business partners.
Value Added Network (VAN)
Hosted service offering that acts as an intermediary between business partners to transmit data (i.e., business documents).
International Organization for Standards (ISO)
An international standard-setting body composed of representatives from various national standards organizations.
Distributed Ledger Technology (DLT)
A type of database that is consensually shared and synchronized across nodes in a network spread across multiple sites, institutions or geographies.
Blockchain
Uses algorithms to enable transactions to be aggregated in blocks, which are added to a chain of existing blocks using a cryptographic signature.
