Business & Corporate
Legal Framework for the Evolving Faster Payments Landscape
With the introduction of a variety of new, faster payment methods, including Same Day ACH, The Clearing House’s RTP® network, and Early Warning Services’ Zelle® payment service, the payments landscape is evolving rapidly. These systems and services are subject to an extensive set of legal requirements. Those aiming to understand this legal framework must look not only to laws and regulations, but also to payment system rules. Core laws include the Electronic Fund Transfer Act (EFTA) and its implementing regulation, Regulation E, and Article 4A of the Uniform Commercial Code (Article 4A). In many cases, the applicability and operation of these requirements, a financial institution’s obligations, and a customer’s rights are dependent on the nature and features of a particular payment transaction. This includes, for example, whether the transaction is a consumer or commercial transaction; whether funds are moved via a “debit pull” or a “credit push” payment; and whether the transaction is reversible or final.