Why 'Success' Does Not Always Mean Settlement in Cross-Border Payments
Cross-border payments may show 'success' before legal settlement, creating risks that require shifting focus from confirmation time to finality.Summary
The article explores the disconnect between technical payment confirmation and legal settlement in cross-border transactions. It highlights that a 'success' status often reflects only the processing of a payment instruction, not its final legal settlement. This creates a 'settlement gap' where risks persist until settlement is complete. Examples like the Citibank and Revlon dispute, and the Synapse Financial collapse, illustrate how technical execution and legal reality can diverge, leading to prolonged disputes or customer uncertainty. The article argues that the industry must prioritize 'Time-to-Finality' over 'Time-to-Confirmation' to align user experience with legal and operational realities. It emphasizes the need for infrastructure and regulatory changes to ensure that a 'Success' message accurately reflects the transaction's true status, reducing risks and improving transparency in cross-border payments.
(Source：The Fintech Times)