What are the payment instructions in DNS systems transmitted through?

Payment instructions in DNS (Deferred Net Settlement) systems are transmitted through a clearing house. A clearing house serves as an intermediary that facilitates the settlement of transactions between different financial institutions. In the context of payment systems, it plays a pivotal role in aggregating payment instructions from various participants, netting them out over a specified period, and then facilitating the final settlement of the net amounts due.

A clearing house enables multiple transactions to be settled in bulk and can significantly increase the efficiency of the payment process. It ensures that funds are transferred securely and helps manage the risks associated with such transactions by providing a structured framework.

In contrast, direct bank transfers, cash transactions, and central bank networks may all involve transferring funds, but they do not specifically describe the process by which payment instructions are aggregated and settled in a DNS environment. Thus, while these options may relate to payment mechanisms, they do not accurately reflect the operational role of a clearing house in DNS systems.