Fundamental Payroll Certification (FPC) 2025 – 400 Free Practice Questions to Pass the Exam

The term "automated clearinghouse" refers specifically to a network that facilitates electronic money transfers among banks. This system allows for the efficient and secure transfer of funds through direct debit and credit transactions without the need for physical checks.

This electronic processing system helps in streamlining payment processes such as payroll deposits, bill payments, and other forms of electronic fund transfers. By using an automated clearinghouse, banks can handle a large volume of transactions quickly and with reduced paperwork, leading to faster and more accurate financial operations.

The other options describe different financial services but do not accurately represent the function of an automated clearinghouse. For example, processing cheque deposits is about handling physical checks, which is distinctly different from electronic transfers. Similarly, an online banking system focuses on managing personal accounts rather than transferring funds between institutions, and a loan service discusses borrowing rather than payment processing.