(866) 927-7180 Glossary
Glossary and Definitions
Without agreed upon definition of terms, all levels of discussions, are meaningless.
1988 - Evaluation Of Finality Of Payment Rules
2008 - Payment Finality And Discharge In Funds Transfers.pdf
| Term | Definition |
|---|---|
| Accessibility | The ability to enable any entity to send and receive payments or payment related information to/from any other entity. |
| Account | A balance (deposit or credit) of funds recorded on an independent ledger that can be used by its owner to send or receive funds. |
| Authentication | The process that verifies the identity or veracity of a user, device, payment or message connected to a payment system. |
| Authorization | The explicit instructions, including: timing, amount, payee, source of funds and other conditions, given by the payer to the payee to transfer funds on a one-time or recurring basis. |
| Authorized Participant | A user that has legal access to a payment solution, payment network or payment service. |
| Cancellation of a Payment | The act of causing a payment to no longer be processed as valid in the payment system (e.g., payment is stopped or reversed). |
| Confidentiality | The set of rules and processes that appropriately limit access to and restrict the sharing of payment and/or other sensitive information (e.g. personally identifiable information). |
| Credential | A verifiable set of data presented by a user to the payment system as evidence of identity. |
| Credit Push | See “Push Payment.” |
| Criteria | The principles or standards by which something must (or will) be compared, judged or evaluated. |
| Debit Pull | See “Pull Payment”. |
| Electronic check and electronic returned check. | (1) Electronic check means an electronic image of a check or electronic information related to a check that– (i) A bank or a nonbank depositor sends to a receiving bank pursuant to an agreement with the receiving bank; and (ii) Conforms with ANS X9.100–187, unless the Board by rule or order determines that a different standard applies or the parties otherwise agree. (2) Electronic returned check means an electronic image of a returned check or electronic information related to a returned check that— (i) A bank sends to a receiving bank pursuant to an agreement with the receiving bank; and (ii) Conforms with ANS X9.100–187, unless the Board by rule or order determines that a different standard applies or the parties otherwise agree. |
| Entity | A person, business, government agency, financial institution or other service provider. Users of the payments system may also be referred to as an entity. |
| Error Resolution | Process of investigating by a user and/or provider to determine whether or not an erroneous, unauthorized or fraudulent transaction has occurred and if so, the corrective measures to be taken by the user and/or provider. |
| FI | A financial institution, including depository institutions, credit unions, thrifts, savings and loans, etc. |
| Finality | See “Irrevocability.” |
| Good Funds | Funds in an account that are unconditionally available and usable immediately by the owner of the account. |
| Interoperability | Ability to process payment instructions across payment systems or platforms. Requires the use of common standards and technical compatibility between systems. 1 |
| Irrevocability | The legal inability of the payer’s financial institution or agent to revoke a transfer of funds that is authorized by the payer. |
| Magnetic ink character recognition line and MICR line | The numbers, which may include the routing number, account number, check number, check amount, and other information, that are printed near the bottom of a check in magnetic ink in accordance with American National Standard Specifications for Placement and Location of MICR Printing, X9.13 (hereinafter ANS X9.13) for an original check and American National Standard Specifications for an Image Replacement Document—IRD, X9.100–140 (hereinafter ANS X9.100–140) for a substitute check, or, for purposes of subpart C and subpart D, contained in the electronic image of and electronic information related to the check in accordance with American National Standard Specifications for Electronic Exchange of Check Image Data— Domestic, X9.100–187 (hereinafter ANS X9.100–187) for an electronic image of and electronic information related to a check, unless the Board by rule or order determines that different standards apply. |
| Multi-Factor Authentication | The use and validation of two or more factors for authentication. Authentication examples:
Note: examples above are not intended to exhaustive. |
| Near Real-Time | Occurs close in time to the act of initiating a payment order or authorizing payment but not necessarily immediately thereafter. |
| Notification | Real-time messages to all the parties involved throughout all levels of the transaction(s), including Authentication, Authorization, Verification, etc. |
| Participant | See “User.” |
| Payee | The intended recipient of a payment. |
| Payment Order or Payment Instruction | The verifiable, signed collection of information created by the payer and sent to the provider authorizing the transfer of funds from the payer to payee. |
| Payment System | The set of technologies, rules, practices and standards necessary for the functioning of the payment system and its services. |
| Payer | The entity that initiates a payment transaction. |
| Posting | Immediate Posting (recordation / reporting) by both the sending and receiving financial institution. |
| Proposal | The written document that provides a detailed description of a faster payments solution, and demonstrates how it meets the Effectiveness Criteria for a faster payments solution. |
| Proposal Work Group | A group formed to develop and revise a proposal. It will be the responsibility of the workgroup to guide the proposal through the Effectiveness Criteria review process. |
| Provider | Defined to include three categories of institutions/organizations:
|
| PSP | Payment Service Provider (See Provider). |
| Pull Payment | A payment made after prior authorization by the payer, the payee sends the payment instruction to the payee’s account to draw on funds from the payer. |
| Push Payment | A payment made when the payer sends the payment instruction to the payer’s account to transfer the payer’s funds to the payee. |
| Real-Time | Immediate/without delay. |
| Routing Number | (1) The number printed on the face of a check in fractional form or in nine digit form; (2) The number in a bank’s indorsement in fractional or nine-digit the bank-identification (3) number contained in an electronic image of or electronic information related to a check. |
| Settlement | An act that discharges obligations in respect of funds between two or more parties. 2 |
| Solution | The collection of components and supporting parties that enable the end-to-end payment process. A faster payments solution might include new components, the adaptation of existing components, and/or a combination of the two.
|
| Task Force Work Group | A group formed to undertake specific topics or assignments that are deemed to be of importance by the task force. Task Force Work Groups will generally be accountable for specific outputs or deliverable(s) to advance task force objectives. |
| Tokenization | The process of replacing sensitive data (e.g., account information) with unique identifiers (i.e., tokens) that either replaces or masks attributes associated with the original data set. |
| Ubiquitous | A payment system that can reach all accounts to ensure that a payer has the ability to pay any entity. |
| User | An entity that is a part of or interacts with the payment system. |
| Verification | Providing a real time verification of what the current balance in checking/savings account of the individual or business and the current account status. |
| Real Estate Terms | Definition |
|---|---|
| "Bank" | means a financial institution, including but not limited to a national bank, state chartered bank, savings bank, or credit union that is insured by the Federal Deposit Insurance Corporation or a comparable agency of the federal or state government. |
| "Borrower" | means the maker of the promissory note evidencing the loan to be delivered at the closing. |
| "Cashier's check" | means a check that is drawn on a bank, is signed by an officer or employee of the bank on behalf of the bank as drawer, is a direct obligation of the bank, and is provided to a customer of the bank or acquired from the bank for remittance purposes. |
| "Certified check" | means a check with respect to which the drawee bank certifies by signature on the check of an officer or other authorized employee of the bank that (i) the signature of the drawer on the check is genuine and the bank has set aside funds that are equal to the amount of the check and will be used to pay the check or (ii) the bank will pay the check upon presentment. |
| "Closing" | means the time agreed upon by the purchaser, seller, and lender (if applicable), when the execution and delivery of the documents necessary to consummate the transaction contemplated by the parties to the contract occurs, and includes a loan closing. |
| "Closing funds" | means the gross or net proceeds of the real estate transaction, including any loan funds, to be disbursed by the settlement agent as part of the disbursement of settlement proceeds on behalf of the parties. |
| "Collected funds" | means funds deposited and irrevocably credited to a settlement agent's account used to fund the disbursement of settlement proceeds which account is a trust account, escrow account, or an account held by a company or its subsidiary which is licensed and supervised by the "State" Commissioner of Banks. |
| "Disbursement of settlement proceeds" | means the payment of all closing funds from the transaction by the settlement agent to the persons or entities entitled to that payment. |
| "Lender" | means any person or entity engaged in making or originating loans secured by mortgages or deeds of trust on real estate. |
| "Loan closing" | means the time agreed upon by the borrower and lender, as applicable, when the execution and delivery of loan documents by the borrower occurs. |
| "Loan documents" | means the note evidencing the debt due to the lender, the deed of trust or mortgage to secure that debt to the lender, and any other documents required by the lender to be executed by the borrower as part of the loan closing transaction. |
| "Loan funds" | means the gross or net proceeds of the loan to be disbursed by the settlement agent as part of the disbursement of settlement proceeds on behalf of the borrower and lender. |
| "Party" or "parties" | means the seller, purchaser, borrower, lender, and settlement agent, as applicable to the subject transaction. |
| "Settlement" | means the time when the settlement agent has received the duly executed deed, deed of trust or mortgage, and other loan documents and funds required to carry out the terms of the contracts between the parties. |
| "Settlement agent" | means the person or persons responsible for conducting the settlement and disbursement of the settlement proceeds, and includes any individual, corporation, partnership, or other entity conducting the settlement and disbursement of the closing funds. |
| "Teller's check" | means a check provided to a customer of a bank or acquired from a bank for remittance purposes, that is drawn by the bank, and drawn on another bank or payable through or at a bank. |
UCC Article 4A - Wired Funds, Wired Funds UCC Article 4A
(1) "Authorized account" means a deposit account of a customer in a bank designated by the customer as a source of payment of payment orders issued by the customer to the bank. If a customer does not so designate an account, any account of the customer is an authorized account if payment of a payment order from that account is not inconsistent with a restriction on the use of that account.
(2) "Bank" means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company. A branch or separate office of a bank is a separate bank for purposes of this Article.
(3) "Customer" means a person, including a bank, having an account with a bank or from whom a bank has agreed to receive payment orders.
(4) "Funds-transfer business day" of a receiving bank means the part of a day during which the receiving bank is open for the receipt, processing, and transmittal of payment orders and cancellations and amendments of payment orders.
(5) "Funds-transfer system" means a wire transfer network, automated clearing house, or other communication system of a clearing house or other association of banks through which a payment order by a bank may be transmitted to the bank to which the order is addressed.
(6) [reserved]
(7) "Prove" with respect to a fact means to meet the burden of establishing the fact (Section 1-201(b)(8)).
(b) Other definitions applying to this Article and the sections in which they appear are:
"Acceptance" Section 4A-209
"Beneficiary" Section 4A-103
"Beneficiary's bank" Section 4A-103
"Executed" Section 4A-301
"Execution date" Section 4A-301
"Funds transfer" Section 4A-104
"Funds-transfer system rule" Section 4A-501
"Intermediary bank" Section 4A-104
"Originator" Section 4A-104
"Originator's bank" Section 4A-104
"Payment by beneficiary's bank to beneficiary" Section 4A-405
"Payment by originator to beneficiary" Section 4A-406
"Payment by sender to receiving bank" Section 4A-403
"Payment date" Section 4A-401
"Payment order" Section 4A-103
"Receiving bank" Section 4A-103
"Security procedure" Section 4A-201
"Sender" Section 4A-103
(c) The following definitions in Article 4 apply to this Article:
"Clearing house" Section 4-104
"Item" Section 4-104
"Suspends payments" Section 4-104
(d) In addition Article 1 contains general definitions and principles of construction and interpretation applicable throughout this Article.
2 Based on the definition of “Settlement” found in Glossary
Original Source: FedPaymentsImprovement