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


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.

  • 1 Based on the definition provided by Glossary
  • Bank of International Settlement 2003, Pg. 27.
    2 Based on the definition of “Settlement” found in Glossary
  • Bank of International Settlement 2003, Pg. 45.

    Original Source: FedPaymentsImprovement

    List of abbreviations used in bank funds transfers

    Original Source: IBAN

    IBAN International Bank Account Number
    The International Bank Account Number is a unique identifier helping banks process payments from person to person automatically. The IBAN contains all necessary information for the owner if a bank account such as the account number, bank and branch information and country code. Although no uniform length has been established for SEPA countries, the IBAN cannot exceed 34 characters. Most countries however, have different fixed lengths. Our validator automatically detects the country and length of the IBAN in order to make an accurate validation.
    BBAN Basic Bank Account Number
    BBAN is short for Basic Bank Account Number. It represents a country-specific bank account number. The BBAN is the last part of the IBAN when used for international funds transfers. Every country has it’s specific BBAN format and length depending on it’s own standards. Currently there is no common EU or other standard unifying the BBAN. This is where the IBAN was introduced to help standardise international bank transfers.
    BIC Bank Identifier Code
    The Bank Identifier Code is an international code that banks use for financial transactions. Each bank has its own BIC. This way, European and international payment orders automatically arrive at the correct bank and branch. The BIC is also called a SWIFT address or SWIFT code. The BIC can be 8 or 11 characters long depending if it supplies branch information.
    SEPA Single Euro Payment Area
    This unique euro payment area establishes an integrated European market for payment instruments. The aim of SEPA is to ensure that payments within Europe take place as simply and effectively as those within a single country.
    ECB European Central Bank
    The European Central Bank is the central banking entity for the Eurozone. It is responsible for the euro currency in the European union. The main task of the ECB consists of maintaining the purchasing capacity of the euro, and so price stability, in the euro zone. The euro zone includes the 17 countries of the European Union that have used the euro since 1999.
    SWIFT Society for Worldwide Interbank Financial Telecommunication
    see BIC
    SCT SEPA Credit Transfer
    The SEPA Credit Transfer has been introduced by the European Payment Council (see EPC) in the beginning of 2008. It is also referred to as a payment scheme or a set of rules for transferring funds between banks in the EU. The SCT (called "European transfer" in Belgium) is to replace the complete range of local euro-denominated payment systems in Europe, both domestic and cross-border.
    SDD SEPA Direct Debit
    The SEPA Direct Debit (called "European direct debit" in Belgium) is a payment protocol defining a set of rules for specific payments between banks in the Eurozone. The SDD Core, like any other direct debit scheme, is based on the following concept: "I request money from someone else, with their prior approval, and credit it to myself". The payer and the biller must each hold an account with a payment service provider (PSP) located within SEPA.
    PSD Payment Services Directive
    The Payment Services Directive has been introduced in 2007 as a set of legal regulations which are aimed to define payment services and payment service providers in the European Union. It’s main purpose is to facilitate the development of the Single Euro Payments Area (SEPA), regulate payments institutions, provide payment transparency and increase competition.
    ACH Automated Clearing House
    The ACH is a type of electronic funds transfer network used in the United States. Similar to the SWIFT in Europe, the ACH provides inter-bank clearing of credit and debit transactions. The ACH electronic network helps banks and financial institutions exchange information in between.
    CSM Clearing and Settlement Mechanism
    The Clearing and Settlement Mechanism is a set of rules regulating how trade is being conducted. Such directives constitute how money and messages are sent in a standardised manner between payment service providers.
    PEACH Pan-European ACH
    A Pan-European Automated Clearing House (PE-ACH) is an ACH that is able to settle SEPA compliant credit transfers and direct debits across the Eurozone. PEACH is also a business platform for the provision of euro retail payment instruments and basic related services, made up of governance rules and payment practices and supported by the necessary technical platform(s).
    EBA Euro Banking Association
    Founded in Paris in 1985 by 18 commercial banks and the European Investment Bank, EBA is an industry forum for the European payment entities with over 200 banks and organisations as members. The Euro Banking Association is one of the main contributors to the creation and development of SEPA.
    EPC European Payments Council
    European banking decision-making body in the area of payments. It coordinates all activities that should lead to the introduction of SEPA.
    BACS Bankers’ Automated Clearing System
    BACS is an acronym standing for Bankers’ Automated Clearing System. It is one of the UK’s inter-bank transfer facilities and is used to process electronic transactions and transfers. The majority of the things processed using the BACS system are direct debits and direct credits. A direct debit is an instruction from an account holder to their bank, authorising a company to withdraw varying amounts of money. Direct Debits are used to ensure a payment can be made regularly, safely and efficiently. They are among the most common financial transactions in the world . A direct credit is effectively the opposite of a direct debit and is commonly used to transfer wages into the bank accounts of employees. Until recently, BACS was also the system at the forefront of one off online payments and payments made through the telephone. However, it was recently introduced by the Faster Payments system. The reason for this is the efficiency of Faster Payments, which processes almost instantly. What’s more is it is able to do this at any time of day, 365 days per year. BACS payments on the other hand take a minimum of 3 banking days to process. Some accounts do not allow for the use of faster payments, therefore they still rely on BACS.
    CHAPS Clearing House Automated Payment System
    As you may have guessed, CHAPS is also an acronym; it stands for Clearing House Automated Payment System, although it is rarely referred to by its full name. CHAPS is another system used for processing payments in the UK. Although anybody is able to use CHAPS, it is a system usually used by businesses in transactions involving large sums of money. Using the CHAPS systems usually incurs a charge of 25 – 30. CHAPS transfers usually process within a day and is commonly used in the purchase of property, with solicitors using the system to transfer funds between the bank accounts of the parties involved. It is also used in other high value payment scenarios. As mentioned earlier CHAPS is used to move funds inter-bank; it is used for this purpose several times a day. In order to make a payment through CHAPS, one usually has to visit your bank with a form of ID to prove your identification. Before making a CHAPS payment, it is worth checking the limit of your bank’s faster payments transfers. Faster Payments can commonly be used for transfers of up to 100,000 and it is instantaneous as well as being free. This is particularly applicable for individual users (as opposed to companies and organisations).
    FPS UK Faster Payments Service
    As mentioned above, the Faster Payments service allows the general public to make payments with the funds being processed and transferred almost instantly. It is regularly used by the general public to make payments such as bills, standing orders and online transfers. The System has been in operation since 2008.
    C&CC UK Cheque and Credit Clearing
    As mentioned above, the Faster Payments service allows the general public to make payments with the funds being processed and transferred almost instantly. It is regularly used by the general public to make payments such as bills, standing orders and online transfers. The System has been in operation since 2008.
    EFT Electronic Fund Transfer
    Represents the way your business can receive direct deposit of all payments from the Commonwealth to your company bank account. Once you sign up, money comes to you directly and sooner than ever before. EFT is Fast, Safe, and means that your money will be confirmed in your bank account quicker than if you have to wait for the mail, deposit your check, and wait for the funds to become available.
    B2B Business to Busines
    SCF SEPA Cards Framework
    The SEPA Cards Framework spells out high level principles and rules which when implemented by banks, schemes, and other stakeholders, will enable European customers to use general purpose cards to make payments and cash withdrawals in euro throughout the SEPA area with the same ease and convenience as they do in their home country.
    EFTA European Free Trade Association
    ECBS European Committee for Banking Standards