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