Industry Updates
Source: PYMNTS
The Clearing House has released a white paper that analyzes the application of the Electronic Fund Transfer Act (EFTA) and Regulation E (Reg E) error resolution requirements to financial institutions involved in certain person-to-person (P2P) transactions.
Additional information and clarity to the application of Reg E, includes:
- How Intermediated Transfers involve two different financial institutions (FIs) and two separate transactions
- How FIs involved in Intermediated Transfers each have responsibilities when it comes to investigating and resolving errors
- How the scope of those responsibilities vary and the type of error asserted matters
- How the various Transfer Provider operating models differ and how Reg E applies differently depending on the model
- How clarity regarding error resolutions is critical for protecting consumers and for the financial services industry
“To best protect consumers, an efficient error resolution process is important for all participants in a P2P Intermediated Transfer,” said Stephen Krebs, Vice President and Associate General Counsel, The Clearing House. “Understanding the various types of Intermediated Transfers, how Reg E applies to different Transfer Provider models, and which financial institution is responsible for error investigation and resolution, are important to making sure that errors are resolved correctly and expeditiously for consumers.”
Federal Reserve Updates
Effective November 21, 2022,Federal Reserve Financial Services will implement changes to the Fedwire® Funds Service’s proprietary message format. Tag {8200} will be added as an optional tag in bank transfer (BTR) and cover payment (CTP COVS) messages. Learn more, including testing opportunities, in this Fed360® article.
Are Payments Innovations Becoming Mainstream?
Last Sunday, my husband and I headed to a local restaurant in town for brunch. When our server delivered the bill, she offered, “I can take this up for you or if you prefer, you may use the QR Code and pay at the table.” Of course, I had to use the QR Code and see what that was all about! Using my mobile phone, I scanned the QR Code, which took me to a shopping cart where I could review my bill and add a tip. I used the credit card stored in my mobile wallet to complete the payment. I was curious how QR codes work for a small business. How did they keep track of who paid and who didn’t? What did their customers think? The restaurant owner explained that the
QR Code payment functions as part of their Point-of-Sale ordering system. Servers are also notified when their customers check-out using the QR Code. The staff loves it because it frees them up to serve other patrons. Patrons love it because it keeps their card in their wallet.
That same week, I had received a text message from my dentist that indicated I had a balance due and offered a link to pay. Hmmm, I thought, is this a scam? I called my dentist office. They advised that this is a new process that was legitimate and secure. I went back to the text and clicked the link where I was prompted to enter my date of birth. I reviewed by bill and selected the option to pay via the credit card in my mobile wallet. The entire process took under a minute. I asked my dentist how they had learned about text messages to collect payments. She explained that the billing via text function is part of their dental management software. The dentist gets paid faster and the patient is free from the pain of writing a check or returning card information.
Both businesses are getting paid faster and improving the payment experience for their customers. Pretty cool!
Source: Digipay
Source: PYMNTS
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