These are a set of cash management instruments that faciliate the movement of funds across entites and companies, both domestically and across borders. Treasurers often look to optimise efficiency and reduce costs when evaluating which cash management instrument to apply.
Here, we provide more information about each of these instruments. You can also build real-time simulations of flows made up of these instruments on Treasury Prism to discover opportunities for optimisation.
Telegraphic Transfer (TT): A telegraphic Transfer (TT) is an electronic method of transferring funds; it is utilised primarily for overseas wire transactions.
Cross-border ACH (Automated Clearing House): Automated Clearing House (ACH) is an electronic network for processing large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit, payroll and vendor payments.
Real-time Gross Settlement (RTGS): Real-time gross settlement are specialist funds transfer systems where the transfer of funds takes place from one bank to another on a real-time and gross basis.RTGS systems are typically used for high-value transactions that require and receive immediate clearing, and payments are final and irrevocable.
ACH Debit: ACH payments are electronic payments where the customer authorises an originating institution, corporation, or other customer (originator) to debit directly from its customer's checking or saving account for the purpose of bill payment.
ACH Credit: ACH Credit is a payment method that allows a payer to initiates payment through their financial institution through the ACH/Federal Reserve network. ACH Credits allow the payer to control the initiation and timing of payments as well as when the date the funds are sent.
Cheque Issuance: Cheque issuance service is typically performed by the financial institutions to address high volume cheque issuance requirements. It is sometimes referred to as cheque outsourcing service. It usually includes an advice with payment information and invoice details to accompany each cheque.
Cheque Deposit: Cheque deposit is a collection service provided by the financial institution where Cheque/ Cashier's Orders/ Demand Drafts are deposited at the bank branch. The service may also sometimes involve engaging provider to collect from the corporate and send to bank.
Bill of Exchange: Bill of exchange, also known as promissory note, is a paper instrument that orders payment from payees at a stipulated timing. They are often used to pay for corporate obligations, and are often issued by corporations to reduce credit risks.
Bitcoin: Bitcoin is a cryptocurrency created in 2009. Bitcoin-to-Bitcoin transactions are usually conducted by exchanging encrypted hash codes across a peer-to-peer network. Usually bitcoin will only be accepted by corporations if there is immediate conversion of bitcoin to fiat money.
Blockchain: Blockchain is the technology behind Bitcoin. It is a distributed ledger that uses cryptographic validation to link blocks of records together. This system ensures that there will be no amendments towards records, with old transactions preserved forever as new transactions are included into the ledger.
Book transfer: The transfer of funds from one deposit account to another within the same financial institution. Book transfer is a way to eliminate check clearing float as there is no wait time for intrabank transfers.
Merchant services: Merchant Services, also known as credit card processing is a service rendered to sellers to facilitate credit card and debit card collections. These services may be extended for onsite (card present) sales or e commerce (card not present) sales.
E-wallet: E-wallet, also known as digital wallet, is an electronic stored value card. The user's payment information for payment methods will be tightly secured with a password. Some e-wallets are also linked to bank accounts, allowing them to serve as mobile banking platforms.
Instant payments/collections: Instant payments are payment solutions that are available 24/7, everyday. The interbank clearing of the transaction and crediting of the payee's account with confirmation to the payer tales place within seconds of payment initiation.
Letter of Credit (L/C): A letter of credit is a paper payment instrument, usually issued by banks to ensure that payment is made as long as the seller meets the L/C requirements. L/Cs are often issued in cross-border trade to reduce credit risk.