Accredited ACH Professional (AAP) Exam 2025 – 400 Free Practice Questions to Pass the Exam

The correct answer is that the CTX (Corporate Trade Exchange) SEC Code requires an agreement between trading partners. The CTX format is designed for the electronic transfer of funds and data between businesses, typically used for business-to-business payments. This format allows for the inclusion of detailed remittance information alongside the payment, facilitating better reconciliation and clearer communication regarding the nature and purpose of the transactions.

To use CTX transactions, the parties involved must establish an agreement specifying the terms of their transactions, as it often involves more complex payment structures and data requirements compared to other SEC Codes. This need for an agreement ensures that both parties understand the specific terms and conditions surrounding the exchange of funds and related data.

Other SEC Codes such as PPD (Prearranged Payment and Deposits) are designed for consumer payments and generally do not require the same level of bilateral agreements between trading partners. WEB (Internet-initiated Entry) is used for transactions initiated by consumer authorization via the internet but doesn't necessitate an agreement in the way CTX does. POS (Point of Sale) transactions are also straightforward and typically used in retail environments without the need for a formal agreement between trading parties.