Podcast
Questions and Answers
What role does a correspondent bank serve in a transaction?
What role does a correspondent bank serve in a transaction?
- It serves as a middleman between the initiating bank and the receiving bank. (correct)
- It exclusively provides funds to the payee within seconds of initiation.
- It operates as an ACH Operator handling interbank clearing.
- It directly manages electronic funds transfer systems.
What defines a direct access situation in electronic funds transfers?
What defines a direct access situation in electronic funds transfers?
- A financial institution that does not utilize routing numbers for transactions.
- A bank that executes transactions through a correspondent relationship.
- A recipient who receives government benefits electronically.
- An Originator transmitting ACH files directly to an ACH Operator. (correct)
Which of the following options is an example of Faster Payments within the context provided?
Which of the following options is an example of Faster Payments within the context provided?
- ACH transfers taking up to a week.
- Monthly direct deposits from employers.
- Visa Direct transactions. (correct)
- Federal Reserve checks.
What does the term 'Participant' refer to in the context of RTP?
What does the term 'Participant' refer to in the context of RTP?
Which institution may serve as an ACH Operator according to the rules outlined?
Which institution may serve as an ACH Operator according to the rules outlined?
What is the primary purpose of an ACH Operator in the electronic funds transfer system?
What is the primary purpose of an ACH Operator in the electronic funds transfer system?
What is the key role of a Funding Manager in the RTP system?
What is the key role of a Funding Manager in the RTP system?
What is the purpose of the Prefunded Balance Account in the RTP system?
What is the purpose of the Prefunded Balance Account in the RTP system?
What is a key role of a Funding Agent in the RTP system?
What is a key role of a Funding Agent in the RTP system?
Which of the following best describes the Prefunded Balance Account?
Which of the following best describes the Prefunded Balance Account?
What does an RDFI need to do in order to be compliant?
What does an RDFI need to do in order to be compliant?
What characterizes a Non-Funding Participant in the context of RTP?
What characterizes a Non-Funding Participant in the context of RTP?
Which of the following accurately defines an Originator in this context?
Which of the following accurately defines an Originator in this context?
What is the primary function of a processing site in the RTP network?
What is the primary function of a processing site in the RTP network?
In a Visa network transaction, what is the primary benefit of push payment credits?
In a Visa network transaction, what is the primary benefit of push payment credits?
What is the last stage of a payment transaction known as?
What is the last stage of a payment transaction known as?
Flashcards
Funding Agent
Funding Agent
A depository institution approved by TCH to fund a group of Non-Funding Participants, ensuring funds are used according to these rules.
Visa Push Payment
Visa Push Payment
A Visa network transaction enabling push payments directly to eligible Visa cards.
Originating Depository Financial Institution (ODFI)
Originating Depository Financial Institution (ODFI)
The financial institution holding the sender's account and initiating a payment.
Sender
Sender
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Card-to-Card Payment
Card-to-Card Payment
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Originator
Originator
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Receiving Depository Financial Institution (RDFI)
Receiving Depository Financial Institution (RDFI)
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Request for Payment
Request for Payment
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ACH (Automated Clearing House)
ACH (Automated Clearing House)
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ACH Operator
ACH Operator
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Correspondent Bank
Correspondent Bank
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Direct Access
Direct Access
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Faster Payments
Faster Payments
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Funding Participant (RTP)
Funding Participant (RTP)
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Funding Provider (RTP)
Funding Provider (RTP)
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Prefunded Participant (RTP)
Prefunded Participant (RTP)
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Study Notes
Account Funding Transaction (AFT)
- Enables funds transfer from a Visa account.
ACH Network / ACH
- US electronic funds transfer system.
- Governed by Nacha Operating Rules.
- Handles interbank electronic entries.
ACH Operator
- Central facility for ACH entry clearing, delivery, and settlement.
- May be a Federal Reserve Bank.
- Executes annual agreements with Nacha.
Beneficiary
- Recipient of funds.
- Can be a person eligible for government benefits.
Correspondent Bank
- Acts as a middleman between banks.
- Provides services on behalf of another bank.
Direct Access
- Originator or third-party transmits ACH files directly to ACH Operator.
- Uses financial institution's routing and transit number.
Faster Payments
- Electronic payments.
- Funds transfer from seconds to a few hours.
- Includes ACH, RTP, FedNow, Same Day ACH, Mastercard Send, Visa Direct.
Original Credit Transfer (OCT)
- Visa network transaction for push payment credits to Visa cards.
Originating Depositary Financial Institution / Sending Participant / Sender FI
- The institution holding the sender's account.
- Initiates the payment.
Originator
- Organization or individual authorizing a transaction.
- May use a third-party sender.
Receiver
- Individual or entity receiving funds.
- Has authorized the transaction.
Receiving Depository Financial Institution (RDFI)
- Receives ACH entries from the ACH Operator for the account of Receivers
- Must follow the Nacha Operating Rules.
Request for Payment/Request To Pay (RFP)
- Process for payer and payee to interact.
- Facilitates funds transfer requests with details.
- Allows automated account payable/receivable processing.
Respondent
- Financial institution sending ACH entries to a correspondent bank.
RTP Prefunded Balance Account
- Joint benefit account for Funding Participants and Funding Agents.
- Supported by the Prefunded Balance Account Bank.
RTP Prefunded Balance Account Bank
- Bank holding the RTP Prefunded Balance Account.
Sending Point
- Location where entries are transmitted to the network.
- May be the ODFI or a third-party service provider.
Settlement
- Final stage of a payment transaction.
- Completes funds transfer after clearing.
The Clearing House (TCH)
- Clearing House Payments Company.
- Operates the Clearing House's Real-time Payments Platform (RTP).
The Federal Reserve's FedNow Service (FedNow)
- Faster Payments system operated by the Federal Reserve.
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