10 Questions
Which network are electronically created payment orders typically cleared through?
Check clearing networks
What is one key difference between electronically created payment orders and traditional checks or RCCs?
They begin with a paper item
Why do the laws and regulations pertaining to check collection not apply to electronically created payment orders?
They do not begin with a paper item
What is one disadvantage of the lack of systemized monitoring of electronically created payment orders?
Increased susceptibility to fraud by Web-based vendors and telemarketers
Which entity is liable for the legitimacy of the items in an electronic check file sent to the Federal Reserve Banks?
Depository institution
Which type of transactions do Reserve Banks accept applicable liability and offer warranties for?
Original paper check items
What is the reason that collecting banks, such as the Reserve Banks, may not be able to avoid accepting electronically created payment orders?
They are unable to distinguish them from electronic images of paper checks
Who assumes liabilities and provides warranties for the legitimacy of the item sent to the Reserve Bank?
The sender's bank
Do Reserve Banks accept liability and offer warranties for electronically created payment orders?
No
What is the main reason that Reserve Banks accept applicable liability and offer warranties for Check 21 transactions?
To comply with legal requirements
Test your knowledge on electronically created payments and learn about this new retail payment practice. Explore how merchants use electronic templates to process payment instructions and understand the similarities and differences between electronically created payment orders and traditional checks or RCCs.
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