Payment Systems Overview Flashcards
The ________ is a process and delivery system that provides for the distribution and settlement of electronic credits and debits among financial institutions.
ACH Network
The ACH movement began in _____ when a group of California bankers formed the Special Committee on Paperless Entries (SCOPE).
1968
The National Automated Clearing House Association (NACHA) was formed in ____ to coordinate the ACH movement nationwide.
1974
What are the main benefits associated the use of the ACH Network?
- Cost Reduction
- Improved productivity over paper check
transactions
Who is the current private sector ACH Operator?
Electronic Payments Network (EPN)
________ provide management, education, assistance, and services to link all types of financial institutions across the United States.
Payments Associations (WesPay, EPCOR, etc.)
The ACH system is a _______, store-and-forward system. Transactions received by the FI during the day are stored and process later in a batch mode.
batch processing
The _____ is the entity that agrees to initiate ACH Entires in o the payment system according to an arrangement with a Receiver.
Originator
An ______ is the central clearing facility operated by a private organization or Federal Reserve Bank on behalf of DFIs to or from which participating DFIs transmit or receive ACH Entries.
Automated Clearing House Operator
The ______ is the institution that receives payment instructions from the _____ and forwards Entires to the ACH Operator.
ODFI, Originator
A _____ is a natural Person or an Organization that has authorized an Originator to initiate an ACH Entry to that Person’s or Organization’s account with the RDFI. Can either be a company or consumer, depending on the type of transaction.
Receiver
Unlike a Check, which is always a debit instrument, an ACH entry may a _____, ______, or _______ entry.
Debit, Credit , Non-monetary
Dividends, payrolls, and government vendor payments are examples of ACH ____ entries.
Credit
Before any transaction is initiated, the Originator and ODFI execute an ______ to use the ACH Network to originate payments.
agreement
The ____ is one of the worlds’s oldest forms of payment.
Check
The traditional Check is a ____ payment instrument.
debit
Fedwire processes each transaction as it is initiated in a real-time, gross-settlement system rather than _____ by _____.
processing, batch.
The Fedwire securities are held and transferred in _____ form known as book-entry securities; unlike the Fedwire Funds Service, the Fedwire Securities Service is a ____/____ system with regard to payments
electronic, debit/pull
The Fedwire Funds Service is a _____/_____ system in which only the Originator’s financial institution can remove funds from its Federal Reserve account.
credit/push
______ are not true payment instruments because they do not result in a direct transfer of funds from the payor to the payee.
Credit Cards
________ are used by card holders at ATMs to withdraw cash from their accounts and may be used as a means of electronic payments.
Debit Cards
The Check system participant known as the Payee’s Depository Financial Institution is also know as ______
Bank of First Deposit (BOFD)
The first Check participant who creates an image of the original Check, or the first bank that transfers, presents, or returns the image of the original Check, is known as the _________.
Truncating Bank
When a Check is sent to another depository institution for collection, is is called a ______ Check.
Transit
