Which payment system operates in a real-time environment, processing each transaction as it is initiated?

Which payment system operates in a real-time environment, processing each transaction as it is initiated?

• A. ACH Network
• B. ClearXchange
• C. Fedwire
• D. ACH Direct

Answer: (C)

The payment system that operates in a real-time environment and processes each transaction as it is initiated is Fedwire. This system is designed for high-value or time-sensitive transactions and allows for immediate transfer of funds between financial institutions. When a transaction is executed through Fedwire, it is settled in real-time, meaning that the funds are transferred and available to the receiving party instantly upon execution. In contrast, other payment systems such as the ACH Network process transactions in batches rather than in real-time. The ACH system typically collects and processes transactions several times throughout the day, which results in delayed fund availability. ClearXchange, which is a person-to-person payment system, also offers faster transaction capabilities, but it does not match the immediate settlement provided by Fedwire. ACH Direct, similarly to the standard ACH Network, operates on a batch processing system and is not designed for real-time transactions.

The payment system that operates in a real-time environment and processes each transaction as it is initiated is Fedwire. This system is designed for high-value or time-sensitive transactions and allows for immediate transfer of funds between financial institutions. When a transaction is executed through Fedwire, it is settled in real-time, meaning that the funds are transferred and available to the receiving party instantly upon execution.

In contrast, other payment systems such as the ACH Network process transactions in batches rather than in real-time. The ACH system typically collects and processes transactions several times throughout the day, which results in delayed fund availability. ClearXchange, which is a person-to-person payment system, also offers faster transaction capabilities, but it does not match the immediate settlement provided by Fedwire. ACH Direct, similarly to the standard ACH Network, operates on a batch processing system and is not designed for real-time transactions.