2025 AFPP Handbook Glossary PDF

A Visa network transaction that enables funds to be pulled from an eligible Visa account. In the context of the US, an electronic funds transfer system governed by the Nacha Operating Rules that provides for the interbank clearing of electronic entries for participating financial institutions. An...

A Visa network transaction that enables funds to be pulled from an eligible Visa account. In the context of the US, an electronic funds transfer system governed by the Nacha Operating Rules that provides for the interbank clearing of electronic entries for participating financial institutions. An ACH Operator is an entity that acts as a central facility for the clearing, delivery and settlement of entries between or among participating DFIs. An ACH Operator may be a Federal Reserve Bank or an entity that executes an annual agreement with Nacha. A person designated as the recipient of funds (i.e.,, a person who has applied for and is entitled to Federal benefits payable by law.) A correspondent bank provides services on behalf of another bank, serving the role of a middleman between the initiating bank and the receiving bank. Direct access is a situation in which an Originator or third-party (either a DFI’s Third-Party Service Provider or an Originator’s Third-Party Sender) transmits ACH files (transactions) directly to an ACH Operator using a financial institution’s routing and transit number and settlement account. Electronic payment services that provide funds to the payee from seconds or up to a few hours of initiation by the payer. In the context of this Handbook, the term Faster Payments refers to ACH’s, RTP, FedNow, Same Day ACH, Mastercard Send, and Visa Direct. 136 In the context of RTP, a depository institution that has become a party to the Prefunded Balance Account Agreement and is either a Funding Manager or a Funding Provider. A depository institution that has been approved by TCH to serve as an agent to one or more Non-funding Participants to (A) provide the Prefunded Requirement and supplemental funding on behalf of each such Non-funding Participant (to the extent it is a Sending Participant) and (B) request disbursements as permitted by RTP Operating Rules for each of its Non-funding Participants. In the context of RTP, a Participant that has become a party to the RTP Prefunded Balance Account Agreement and that (i) requests and receives disbursements from the Prefunded Balance Account, as permitted by the RTP Operating Rules, to its Federal Reserve account and (ii) if the Participant is a Sending Participant, prefunds for itself in accordance with these RTP Participation Rules and the RTP Operating Rules. A depository institution that has been approved by TCH to have a funding arrangement with a group of Non-Funding Participants under which the depository institution provides funding for use by the Non-funding Participants consistent with these Rules. In the context of RTP, a Participant that is not a Funding Participant and that has designated a Funding Agent to act on its behalf to prefund in accordance with these RTP Participation Rules and the RTP Operating Rules. A Visa network transaction that enables eligible Visa cards to receive push payment credits. The financial institution that holds the sender’s account and initiates a payment. An organization or natural person that has authorized an ODFI (directly or through a Third-Party Sender) to transmit, for the account of that organization or natural person, a credit entry, debit entry, or non-monetary entry to the Receiver’s account at the RDFI. A process whereby money is sent to a debit or prepaid card belonging to an individual or business. THE 2025 AFPP HANDBOOK 137 An individual, corporation or other entity who has authorized an Originator to initiate a credit entry, debit entry, or non-monetary entry to the Receiver’s account held at the RDFI. A Participating Depository Financial Institution that receives ACH entries from the ACH Operator to the accounts of Receivers. An RDFI must agree to abide by the Nacha Operating Rules. A process (usually built around API/messages) that allows a payee and payer to interact and request a funds transfer, providing details of the reason for the request, alterations to the payment, allowing automated account payable/receivable processing. A financial institution that sends ACH entries to a correspondent bank. The special deposit account established for the joint benefit of all Funding Participants and Funding Agents by the Prefunded Balance Account Bank for the purpose of supporting the operations of the RTP System The bank that holds the Prefunded Balance Account A processing site from which entries are transmitted to the network. It may be the ODFI on its own behalf or a financial institution or a Third-Party Service Provider on behalf of the ODFI. The final stage of a payment transaction to complete the funds transfer after the clearing/exchange has already been validated and completed. The Clearing House Payments Company L.L.C. The Faster Payments system owned and operated by The Clearing House The Faster Payments system owned and operated by The Federal Reserve 138