FX Payment Expiration Timing
Details:
For payments that involve a currency exchange (eg USD→EUR) and are awaiting user approval, PayRecs extends locked rates on FX payments for up to 5 business days.
Previously, this rate lock was infinite. In order to control risk and consolidate operational and support complexity, a 5 day rule will be in effect.
Q: What happens if a user doesn’t approve after 5 business days?
A: PayRecs support will reach out to the designated FI contact. For currencies where a balance can be held (EUR, GBP, CAD, etc), there is an option to place the balance into that account for future use. If the trade involves a currency which CANNOT be held, or the FI wants to return USD to the customer, we will cancel the trade and return USD.
Q: Will the customer get the full amount of their USD back?
A: Sometimes yes. However, depending on the volatility, liquidity and time frame of the cancelled payment, there may be a market loss. If a loss occurs, it will be reflected in the amount returned to the customer.
Q: How will customers be made aware of the approval timeline?
A: There are 4 ways that we are adding urgency and being proactive on this change.
We continue to send daily reports to you, the bank, about outstanding payments, found in the EOD settlement report under “Unapproved Payments.”
If you have the approval reminder enabled (highly encouraged), your customers will receive a daily reminder of payments that require approval.
Both the normal approval email notification and the daily approval reminder email has been enhanced with additional warning text:
This payment includes a currency trade and is pending approval for release. If this payment is not approved within 5 business days of creation, the payment and related trade will be cancelled. The resulting USD will be returned to your institution and the amount returned may vary due to market fluctuation.
Lastly, we’ll be monitoring payments that are at 3 days unapproved and our support desk will reach out to you directly to encourage your customers to approve the payment if you choose to do so.