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Sales draft A record that a drawer cardholder has authorized a provider of goods or services to obtain funds from its account with a drawee for the purchase of goods or services.
Security procedure A procedure agreed upon by a bank and a customer to verify that a U.C.C. Article 4A payment order purporting to have been sent by the customer is actually that of the customer. Also a procedure to detect errors in the customer’s transmission of payment orders.
Settlement Payment between banks for cleared payment instructions or checks. Also the reporting of settlement amounts owed by one member to another, or to a card-issuing concern, as a result of clearing. This is the actual buying and
selling for transactions between the merchants, processors, and acquirers, along with the card-issuing entities.
Smart card A credit or debit card embodying a computer chip with memory and interactive capabilities used for identification and to store additional data about the cardholder, cardholder account, or both. Also called an integrated circuit card or a chip card.
Stored value card A card on which “electronic funds” are loaded for the payment of goods and services at the point of sale. The value stored on the card is decreased with each purchase.
SWIFT, Society for Worldwide International Financial Communications An international telecommunications network for the sending of payments and other messages.
Terminal A device enabling the user to communicate with a computer. The device is sometimes called an input/output device or an I/O terminal.
Wholesale funds transfer The term is not a precise one and is not authoritatively defined anywhere. A transfer involving a consumer, which would normally be governed by Regulation E, would not be a wholesale funds transfer. A transfer utilizing either of the two large-dollar value funds transfer systems, Fedwire and CHIPS, would typically be a wholesale funds transfer. A U.C.C. Article 4A funds transfer of a large-dollar amount not involving a consumer, but also not involving a large-value funds transfer system, may also be called a wholesale funds transfer. Small-value funds transfers are called “retail” wire transfers.
Wire transfer transaction A term commonly applied to an electronic funds transfer transaction. See Electronic funds transfer.
AFP Update. Contact Association for Finance Professionals for membership.
Friedman, Milton. Money Mischief: Episodes in Monetary History. San Diego, CA: Harcourt Trade Publishers, 1994.
Geva, Benjamin (with contributions by S. A. Heller, P. S. Turner, and S. R. Vicksman). The Law of Electronic Funds Transfers. Newark, NJ: Matthew Bender, 1992 (revised annually).
Patrikis, Ernest T (with Thomas C. Baxter Jr. and Raj K. Bhala).
Wire Transfers: A Guide to U.S. and International Laws Governing Funds Transfers. Rolling Meadow, IL: Bankers Publishing Co., 1993.
Turner, Paul S. Law of Payment Systems and EFT. New York: Aspen Law and Business, 1999 (revised annually). Note: This annually updated book includes Mr. Turner’s most recent text on
Negotiating Wire Transfer Agreements. (See below.)
Turner, Paul S. Negotiating Wire Transfer Agreements: A Guide for Treasury Executives, Bankers, and Attorneys. Bethesda, MD: Treasury Management Association (now Association for Finance Professionals), 1996.
Subcommittee on Payments, Uniform Commercial Code Committee. Model Positive Pay Services Agreement and Commentary. Chicago, IL: American Bar Association, 1999.
Working Group on Electronic Financial Services, Subcommittee on Electronic Commercial Practices, Uniform Commercial Code Committee. Model Funds Transfer Services Agreement and Commentary. Chicago, IL: American Bar Association, 1994.
OTHER REFERENCE RESOURCES
Association for Finance Professionals; reference books; www.afponline.org.
Federal Reserve Bank, Discount Window. Payment Systems Risk, Frequently Asked Questions. www.frbdiscountwindow.org/psrfaq.htm.
www.newyorkfed.org/banking/information. A good general reference about banking systems.
www.nych.org. Web site for the New York Clearing House.
www.SWIFT.com. Current information about SWIFT services and initiatives.
ACH (Automated Clearing House) payments, 141-179 ACH and NACHA associations, 141-142 ACH addenda record, EDI, 163 ACH Cross-border payments, 174 Gateway operators, 175 ACH debit and credit entries description, 142-44 ACH description, 19 ACH Federal government payments, 175-177 difference between standard ACH and federal agency ACH, 176 Federal Management Systems (FMS), 176 Pre-Authorized Debit (PAD), 176
vendor express program, 176 ACH Origination of entries, 144-160 ACH debit and interregional credit entries examples, 144-145
ACH prenotification for testing an ACH entry, 155 cash letter description, 158 miscellaneous obligations of Originators, 159 personal identification numbers, 160 preauthorized debit transfers from a consumer’s account, 160 ODFI destroyed check entries, 158