Fundamentals

Question 1

Maximum transaction value limit for FedNow.

Answer 1

$500,000

Question 2

Network whose rules are set by Nacha.

Answer 2

ACH Network

Question 3

Transaction value limit for Same Day Entry.

Answer 3

$1,000,000

Question 4

Batch-processing store-and-forward system.

Answer 4

ACH Network

Question 5

ACH Network primary participants.

There are 5 primary participants.

Answer 5

1. Originator
2. ODFI
3. ACH Operator
4. RDFI
5. Receiver

Question 6

Network whose rules are set by The Clearing House.

Answer 6

RTP

Question 7

Major card networks used for faster payments in the United States.

Answer 7

Mastercard Send & Visa Direct

Question 8

Current transaction value limit for RTP.

Answer 8

$1,000,000

Question 9

Transaction value limit for Mastercard Send for P2P transfers.

Answer 9

$10,000

Question 10

Primary goal of faster payments.

Answer 10

To enable quicker transaction processing and settlement, often in real-time or near real-time.

Question 11

RTP participants.

There are 3 participants.

Answer 11

1. The Clearing House
2. Financial institutions
3. Technology providers

Question 12

Network that requires all transactions are digitally signed and encrypted.

Answer 12

RTP

Question 13

Instant payment channel created and operated by the Federal Reserve.

Answer 13

FedNow Service

Question 14

Participant default transaction limit for FedNow.

Answer 14

$100,000

Question 15

Fraud mitigation strategies for this network include transaction limits at the network and participant levels and participant-defined negative lists.

Answer 15

FedNow Service

Question 16

FedNow participants.

There are 4 participants.

Answer 16

1. The Federal Reserve
2. FedNow participants
3. Service providers
4. Correspondents

Question 17

Card application that manages transactions through internal ledgers and batch netting.

Answer 17

Mastercard Send

Question 18

Card application that settles transactions once daily, transferring funds from Sender to Receiver Financial Institutions at the end of the business day.

Answer 18

Visa Direct

Question 19

ISO 20022 is the messaging standard for these payment rails.

There are 2.

Answer 19

1. RTP
2. FedNow Service

Question 20

ISO 8583 is the messaging standard for these payment applications.

There are 2.

Answer 20

1. Mastercard Send
2. Visa Direct

Question 21

Network that settles payments in real time via a pre-funded account.

Answer 21

RTP

Question 22

How financial institutions connect to RTP.

Answer 22

Directly or via third-party processors, while non-bank payment service providers connect via a participating financial institution

Question 23

Fraud and risk controls required in RTP.

There are 4.

Answer 23

1. Strong authentication
2. Fraud detection and prevention
3. Fraud reporting
4. Consumer protection policies

Question 24

Impact of faster availability of funds on consumers and merchants.

Answer 24

Improving liquidity management and enabling last-minute bill payments

Question 25

Ways faster payment systems improve predictability for stakeholders.

Answer 25

They offer instant confirmation and expedited posting speed, allowing better cash flow management and decision-making.

Question 26

Ways ISO 20022 messaging standards benefit stakeholders in faster payment systems.

Answer 26

Provides richer payment data, improving reconciliation, integration, fraud prevention models, and reducing friction in security screenings.

Question 27

Challenges financial institutions face with 24/7 processing in faster payment systems. | There are 2.

Answer 27

1. System maintenance and upgrades 2. Addressing issues without downtime

Question 28

Refers to the point at which a payment becomes final, meaning that neither the Originator nor the originating entity can recover the funds, even in cases of human error or fraud.

Answer 28

Irrevocability

Question 29

The ability of two separate technical systems to communicate or exchange payment messages with one another.

Answer 29

Interoperability

Question 30

Term used for ensuring the person initiating a payment instruction is allowed to do so.

Answer 30

Payer authentication

Question 31

A non-monetary entry used to verify the accuracy of account data.

Answer 31

Prenotification entry

Question 32

ACH credits of less than $1, and any offsetting debits, used by an Originator to verify a Receiver’s account or an individual’s access to an account.

Answer 32

Micro-entries

Question 33

FedNow transfer sent by a Sending Financial Institution to a Receiving Financial Institution to initiate a funds transfer from a Sender's account to a Receiver's account.

Answer 33

Customer Credit Transfer

Question 34

Financial Institution transfer used to transfer funds between the Master Accounts or Correspondent Account(s) of 2 FedNow Participants, or between a FedNow Participant’s Master Account and a joint account.

Answer 34

Liquidity Management Transfer (LMT)

Question 35

Non-value message that allows the participant to avoid making funds immediately available to its customer and allows an opportunity to investigate the payment when concered with its credibility.

Answer 35

Accept Without Post (ACWP)

Question 36

RTP value message that is sent by a Sending Financial Institution to a Receiving Financial Institution to initiate a funds transfer from a Sender's account to a Receiver's account.

Answer 36

Credit transfer

Question 37

Used to convert an eligible source document received by mail, in person, or at a manned location to collect funds from the other party’s accounts.

Answer 37

Accounts Receivable Entry (ARC)

Question 38

Refers to an ACH credit or debit entry made between two corporate accounts. ## Footnote Frequently used to concentrate funds from outlying accounts, fund payroll, or other disbursements accounts. Can contain a single addendum to record payment related information.

Answer 38

Corporate Credit or Debit Entry (CCD)

Question 39

Refers to a single consumer-initiated ACH credit or debit entry at a POS terminal using a card or other access device.

Answer 39

Point-of-Sale Entry (POS)

Question 40

Non-monetary entry sent to acknowledge a CCD credit entry.

Answer 40

ACH Payment Acknowledgment (ACK)

Question 41

A non-monetary ACH entry used to inform participating financial institutions about changes in a customer’s banking information or to indicate the rejection of such changes, used to ensure accurate and updated information for fund transfers.

Answer 41

Notification of Change (COR) or Refused Notification of Change

Question 42

Refers to a single payment initiated by a business, non-profit, or governmental organization to distribute funds either to businesses or individuals.

Answer 42

Disbursement payment

Question 43

Visa Direct value message that refers to a single payment initiated by a business, non-profit, or governmental organization to disburse funds either to businesses or individuals.

Answer 43

Original Credit Transaction (OCT)

Question 44

Single payment initiated by an individual to fund another person’s non-merchant account.

Answer 44

Account Funding Transaction (AFT)