CCM Payment Systems & Technology Flashcards

Which payment rail is used for large-value, time-critical domestic US payments?

Answer: Fedwire

Fedwire is the Federal Reserve's real-time gross settlement (RTGS) system used for large-value, time-critical domestic US dollar payments.

ACH (Automated Clearing House) transfers are best suited for:

Answer: High-volume, low-value batch payments such as payroll

ACH is designed for high-volume, low-value batch transactions — payroll, direct deposits, and recurring vendor payments — processed in scheduled settlement windows.

Same Day ACH is primarily designed to:

Answer: Enable faster settlement of ACH transactions within the same business day

Same Day ACH allows eligible ACH transactions to settle within the same business day, reducing the standard 1–2 business day settlement lag.

SWIFT messaging is primarily used for:

Answer: International bank-to-bank financial messaging

SWIFT (Society for Worldwide Interbank Financial Telecommunication) provides a secure, standardized messaging network for international bank-to-bank payment instructions and financial communications.

Which payment method offers the highest level of payment finality and irrevocability?

Answer: Wire transfer via Fedwire

Fedwire wire transfers provide immediate and irrevocable payment finality upon settlement, unlike ACH or checks which can be reversed or returned.

A virtual account structure in treasury management allows companies to:

Answer: Segment and track cash flows by entity or purpose within one physical bank account

Virtual accounts enable treasurers to track and segregate cash flows by business unit, subsidiary, or purpose under a single physical bank account without opening multiple real accounts.