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CPP Treasury & Cash Management in Payments Flashcards

6 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 CPP Treasury & Cash Management in Payments flashcards as text

  1. What is 'float' in the context of payment treasury management?

    Answer: The difference between a company's book balance and bank balance

    Float in treasury refers to the difference between the company's internal book balance and the actual bank ledger balance, created by the delay between recording and clearing payments.

  2. What is a 'merchant reserve account'?

    Answer: Funds held by the acquirer as security against future chargebacks or losses

    A merchant reserve account is a portion of settlement funds withheld by the acquiring bank to cover potential chargebacks, refunds, or merchant default.

  3. What does 'next-day funding' mean for a payment service provider?

    Answer: Settlement of card transaction proceeds is deposited into the merchant's bank account the business day after the transaction

    Next-day funding means the acquirer or PSP deposits the merchant's net settlement proceeds into their bank account on the following business day after the processing day closes.

  4. In treasury management, what is 'concentration banking'?

    Answer: Consolidating funds from multiple accounts into a single master account to optimize cash visibility and investment

    Concentration banking (or cash concentration) sweeps balances from subsidiary or regional accounts into a central master account, improving liquidity management and reducing idle cash.

  5. What is a 'rolling reserve' in merchant acquiring?

    Answer: A percentage of each settlement held for a defined period before release to the merchant

    A rolling reserve withholds a percentage of daily settlements (e.g., 5–10%) and releases the oldest held amounts after a set period (e.g., 180 days), creating a continuously rolling collateral pool.

  6. What is the primary function of SWIFT in the international payment ecosystem?

    Answer: A secure messaging network that enables financial institutions to send standardized payment instructions across borders

    SWIFT (Society for Worldwide Interbank Financial Telecommunication) provides the secure, standardized messaging infrastructure financial institutions use to instruct cross-border fund transfers.