What kind of payments do Fedwire Securities operate on?

What kind of payments do Fedwire Securities operate on?

• A. Debit payments
• B. Credit payments
• C. Cash payments
• D. All of the above

Answer: (B)

Fedwire Securities operates on credit payments. This system allows for the electronic transfer of securities, which involves the crediting of the securities account of the receiver and the debiting of the securities account of the sender. In this sense, it is a credit transaction because it represents a movement of ownership of the securities as credit through the accounts of the institutions involved. The underpinning feature of the Fedwire Securities service is its focus on the secure and timely transfer of securities between financial institutions, which inherently involves the settlement of transactions on a real-time basis. Therefore, payments are processed as credit transactions, ensuring deliverability without the risk of insufficient funds that might occur with other types of payment methods.

Fedwire Securities operates on credit payments. This system allows for the electronic transfer of securities, which involves the crediting of the securities account of the receiver and the debiting of the securities account of the sender. In this sense, it is a credit transaction because it represents a movement of ownership of the securities as credit through the accounts of the institutions involved.

The underpinning feature of the Fedwire Securities service is its focus on the secure and timely transfer of securities between financial institutions, which inherently involves the settlement of transactions on a real-time basis. Therefore, payments are processed as credit transactions, ensuring deliverability without the risk of insufficient funds that might occur with other types of payment methods.