Electronic Check Transfer

B.

Electronic check system model real-world checks quite well and thus relatively simple to understand and implement.

A users write an electronic check, which is digitally signed instruction to pay.

This is transferred to another user, who then deposits the electronic check with the issuer.

The issuer will verify payer's signature on the payment and transfer the fund from the payer's account to the payee's account.

For CISA exam you should know below information about payment systems There are two types of parties involved in all payment systems " the issuer and the user.

An issuer is an entity that operates the payment service.

An issuer holds the items that the payment represents.

The user of the payment service performs two main functions- making payments and receiving payments " and therefore can be described as a payer or payee receptively.

Electronic Money Model " The objective of electronic money systems is emulating physical cash.

An issuer attempts to do this by creating digital certificates, which are then purchased by users who redeem them with the issuer at a later date.

In the interim, certificates can be transferred among users to trade for goods or services.

For the certificate to take on some of the attributes of physical cash, certain techniques are used so that when a certificate is deposited, the issuer can not determine the original withdrawer of the certificate.

This provides an electronic certificate with unconditional uncertainty.

Electronic Check Model " Electronic check system model real-world checks quite well and thus relatively simple to understand and implement.

A users write an electronic check, which is digitally signed instruction to pay.

This is transferred to another user, who then deposits the electronic check with the issuer.

The issuer will verify payer's signature on the payment and transfer the fund from the payer's account to the payee's account.

Electronic Transfer Model " Electronic systems are simplest of three payment models.

The payer simply creates a payment transfer instructions, sign it digitally and send it to issuer.

The issuer then verifies the signature on the request and performs the transfer.

This type of systems requires payer to be on-line and not payee.

The following were incorrect answers: Electronic Money Model " The objective of electronic money systems is emulating physical cash.

An issuer attempts to do this by creating digital certificates, which are then purchased by users who redeem them with the issuer at a later date.

In the interim, certificates can be transferred among users to trade for goods or services.

For the certificate to take on some of the attributes of physical cash, certain techniques are used so that when a certificate is deposited, the issuer can not determine the original withdrawer of the certificate.

This provides an electronic certificate with unconditional uncertainty.

Electronic Transfer Model " Electronic systems are simplest of three payment models.

The payer simply creates a payment transfer instructions, sign it digitally and send it to issuer.

The issuer then verifies the signature on the request and performs the transfer.

This type of systems requires payer to be on-line and not payee.

Electronic Withdraw Model " Not a valid type of payment system.

The payment model described in the question is the Electronic Check model.

In this model, the payer initiates a payment by writing an electronic check, which is essentially a digital version of a paper check. The electronic check includes information such as the payer's account number, the payee's account number, the payment amount, and the payer's digital signature, which serves as authorization for the payment.

The electronic check is then transferred to the payee, who deposits it with the issuer. The issuer then verifies the payer's signature and transfers the funds from the payer's account to the payee's account.

Electronic checks are often used for transactions between individuals or businesses that have an ongoing relationship, such as recurring payments for rent or utilities. They offer a convenient and secure way to make payments without the need for physical checks or cash.

It is important to note that electronic checks are subject to the same legal and regulatory requirements as paper checks, and must be processed and cleared through the same banking channels. As with any payment model, it is important to ensure that appropriate security measures are in place to protect against fraud and unauthorized access to accounts.