Which characteristic best describes how DNS payments are settled?

The characteristic that best describes how DNS (Deferred Net Settlement) payments are settled is that they are settled at predefined intervals. This method allows multiple transactions to be aggregated over a specific period, typically throughout the day, and settled collectively at designated times rather than immediately after each transaction. This approach helps in reducing the total number of transactions that need to be settled, thus lowering the operational costs and enhancing efficiency.

In contrast, immediate settlement at delivery implies that each transaction would be settled right as it occurs, which is not the case for DNS. Additionally, the idea of only settling at the end of the month does not align with the usual practice of DNS, which operates on shorter settlement cycles that can occur daily. Finally, while cash transactions can certainly be involved in overall payment systems, DNS specifically focuses on the netting of obligations rather than utilizing cash transactions exclusively for settlements.