Cash Management and Payment Systems
Payment rails and controls
Cash management and payment systems covers the instruments, channels, and controls used to move money and information. Know ACH (NACHA rules, batch and net settlement, same-day ACH, SEC codes such as CCD, CTX, PPD, and WEB), wire transfers (Fedwire and CHIPS in the U.S.; SWIFT as messaging, not settlement), checks, cards, RTP and FedNow instant payments, and ISO 20022 rich data. Understand finality: wires and instant credit transfers are generally irrevocable; ACH payments can be returned; checks can be stopped. Payment factories centralize execution; straight-through processing depends on valid bank data and agreed formats. Controls include dual approval, callback verification, positive pay, payee validation, limits, and segregation of duties.
Traps
SWIFT does not settle funds; it carries messages. ACH is not real-time unless same-day ACH is used, and same-day ACH has cutoffs and per-payment limits. Missing a wire cutoff pushes settlement to the next business day. Value dating can differ from transaction date. Card payments are not suitable for large supplier settlements. RTP and FedNow operate 24/7 but have message and amount limits.
Worked example
A supplier demands $2.5 million by 3:00 p.m. today. A domestic Fedwire payment before the Fedwire cutoff provides same-day final settlement, but same-day ACH may exceed its per-payment ceiling and has earlier windows. Use a wire, confirm beneficiary details via callback, and record the Fed reference. Rule of thumb: match the rail to amount, urgency, finality, cost, and remittance data.