Responsibilities to comply with the operating rules
Details the participants’ responsibility to comply with the operating rules and cooperate in the running of the scheme (example: Faster Payments, Section 4)
Responsibilities as a sending participant (transferring money to another participant)
Operating rules will have provisions to specify the responsibility of the sending party. These include:
- The rules may or may not specify exactly how this must be done. There may be a relationship to sender liability and the authentication method (see ‘Standards- End-user Identification‘)
- To document the sending party’s agreements with respect to the rules, particularly for enterprise senders. Typically in operating rules the sending participant is warranting compliance with these obligations when sending the transaction.
- There may or may not be a requirement that the sending participant send the transaction within a period of time from receiving the instruction from the sending end-party.
- There may be particular requirements specific to a use case: for example, transactions paying to a business or to another consumer.
- At some point in the process, the sending participant becomes obliged to settle the transaction in the scheme settlement process (see section ‘Settlement‘): this is the point at which the transaction is irrevocable by the sending participant. Exactly when this obligation takes effect is an important aspect of the rules. Most typically, it will be when the switch or operator receives the transaction (example: Faster Payments, Section 6.2.1). There may be variations by use cases (example: NACHA, Section 22.214.171.124c) or exceptions for various types of transaction problems that may occur.
Responsibilities as a receiving participant
Like the sending party, there are also operating rules for the receiving participant. These include:
- An important provision of most rule sets is a requirement that they accept all payments that have been properly sent (example: NACHA, Section 3.1).
- There may be a rule requiring the receiving participant to make funds available to the receiving end-party within a given period of time (example: SPEI, Section 6).
- It is important for rules to specify whether or not the receiving bank can post the transaction based simply on an account number identifier, or if they have any kind of obligation to otherwise ensure a match for that account holder. The U.S. ACH system does not require this (example: NACHA, Section 3.1.2).
The Financial Inclusion Perspective
Either rules or country regulation should ensure that the receiving participant is made to post a transfer to a receiver’s account immediately, or as soon as practically possible. Rules should support that funds sent are irrevocably retrieved. Together, this will strengthen the utility of the system as an alternative to cash payments.