CPP International Payments & Cross-Border Transactions 2

Question 1

What is the key difference between the SHA, OUR, and BEN cost-sharing options in international wire transfers?

Accepted Answer

They dictate which party (sender, recipient, or both) pays the transaction fees

Answer

SHA (shared), OUR (sender pays all fees), and BEN (beneficiary pays all fees) are charge-sharing instructions that determine how bank fees are allocated between the sending and receiving parties in an international transfer.

Question 2

What is the purpose of ISO 20022 in the context of international payments?

Accepted Answer

To provide a universal financial messaging standard that enables richer, more structured payment data

Answer

ISO 20022 is a global standard for financial messaging that enables richer, more structured and consistent data in payment messages, improving automation, compliance, and reconciliation across international payment systems.

Question 3

Which of the following best describes the 'lifting fee' in an international payment?

Accepted Answer

A fee charged by an intermediary or correspondent bank for processing the transfer

Answer

A lifting fee is a charge levied by an intermediary or correspondent bank for handling and processing an international wire transfer as it passes through that institution.

Question 4

What is the primary purpose of Know Your Customer (KYC) requirements in cross-border payments?

Accepted Answer

To verify the identity of clients and assess their risk profile to prevent financial crimes

Answer

KYC requirements mandate that financial institutions verify and understand their customers' identities and assess the risk of potential money laundering or terrorist financing before facilitating cross-border transactions.

Question 5

Which payment system is used for high-value U.S. dollar transactions that often serve as the settlement leg for international payments?

Accepted Answer

CHIPS

Answer

CHIPS (Clearing House Interbank Payments System) is the primary U.S. private-sector system for large-value, same-day dollar transactions, including the dollar settlement of many cross-border payments.

CPP - Certified Payment Professional Practice Test

CPP - Certified Payment Professional Practice Test

CPP International Payments & Cross-Border Transactions 2