Payments Systems and Instant Payments Quiz

A payment method that enables funds to be sent and received in real-time, typically within seconds.

Payments that are processed and settled within the same business day.

The process of transferring funds from one account to another, often using a central bank or financial institution.

A network that allows for faster payments between financial institutions, often using a central bank's funds.

A specific Faster Payment Rail operated by the Federal Reserve, allowing for real-time payments using Federal Reserve funds.

A Faster Payment Rail operated by The Clearing House (TCH), supporting real-time payments using shadow accounts held at the Federal Reserve.

A Faster Payment Rail utilizing the existing ACH network for same-day payments, typically processed three times a day.

A payment method offered by Mastercard for faster transfers, typically completing within 30 minutes.

Small ACH credits (less than $1) used to verify an account or access.

Messages that initiate fund transfers between participants in a payment network.

Messages that don't involve funds and provide details or reports about value messages.

Codes that define the type of payment message in the ACH Network.

A credit transfer initiates funds transfer from a sender's account to a receiver's account.

Transfers funds between FedNow participants' master accounts or correspondent accounts.

A message sent to return previously received funds.

Messages sent when a payment message fails validation in the FedNow Service.

The US ACH Network is a system that enables the electronic transfer of funds between bank accounts, reaching all accounts in the US.

Nacha sets the rules for the US ACH Network, ensuring smooth and secure transactions.

Direct Deposit and Direct Payments are two common uses of the ACH Network. Direct Deposit enables receiving salaries or benefits electronically into your account. Direct Payments allow you to pay bills automatically.

The ACH Network is made up of two interconnected networks: FedACH, operated by the Federal Reserve, and EPN, owned by The Clearing House. They work together to process ACH transactions seamlessly.

The ACH Network facilitates the exchange of credit and debit information between financial institutions, allowing for electronic payments and transfers.

ACH transactions are processed in batches, grouped together for efficiency. These batches are submitted by financial institutions to the ACH Operator for processing during specific timeframes.

ACH transactions typically take one to two business days to complete due to the batch processing method. However, Same Day ACH transactions are available for faster payments.

The ACH Network involves five key players: the payer, recipient, originating and depository institutions, and the ACH Operator. Each player plays a specific role in the process.

The requirements that determine if a financial institution is eligible to use FedNow.

A financial institution capable of participating directly in FedNow.

The type of connection a financial institution has to FedNow.

A profile required for financial institutions that participate directly in FedNow.

A profile required for service providers that facilitate FedNow connections for other institutions.

Access to a Federal Reserve Master Account, enabling a financial institution to directly participate in FedNow.

An organization providing services related to FedNow participation, without having a Master Account.

A type of financial institution that relies on a service provider to connect to FedNow, lacking a Master Account.

The financial institution (FI) responsible for initiating ACH entries (payments) into the ACH Network. They must have an originating agreement with the sender and verify the recipient's authorization.

An ODFI is prohibited from sharing sensitive financial information, like account or routing numbers, with third parties without explicit consent.

The FI responsible for receiving ACH entries (payments) and making funds available to the receiver. All depository FIs participating in Nacha are required to comply with RDFI requirements.

ODFIs are obligated to accept and process return entries that comply with ACH processing rules.

RDFIs are responsible for ensuring that funds are posted to the receiver's account by a specific time for same-day ACH transactions. The deadline depends on the processing window.

For transactions that are not credit entries between individuals, the ODFI must obtain authorization from the receiving entity to initiate ACH entries to their account.

ODFIs must have fraud detection systems in place and verify the identities of other FIs or entities involved in transactions. This is crucial for security and risk mitigation.

RDFIs must adhere to Nacha operating rules regarding timely processing and posting of ACH entries. This ensures efficient and secure processing.

A financial institution (FI) that acts as both the originator and receiver of an ACH transaction.

A non-financial institution (non-FI) that facilitates ACH transactions for other entities. Often acts as an intermediary or service provider.

Requirements for eligibility to participate in the ACH network.

A set of regulations governing ACH transactions, including those related to same-day ACH.

A formal agreement between a financial institution and the Federal Reserve that allows participation in the ACH network.

A process where a financial institution verifies its compliance with ACH regulations.