News

Dodd-Frank prompts cross-border payments upgrades at Earthport

August 22, 2012

The London-based global financial services provider Earthport has announced plans to enhance its cross-border payments service to address stipulations in Section 1073 of the Dodd-Frank Act that will take effect in February of 2013.

Under DFS1073, international transfers from individuals in the U.S. are subject to clear and conspicuous disclosures about the cost of a transfer, the amount of currency to be delivered to the recipient and the date when funds will become available.

Earthport recently hosted a webinar that discussed how the new regulations will affect the cross-border consumer payments market. (A replay is available at Earthport's website.) 

The webinar provided statistics about FI response to DFS1073:

• 83 percent of FIs have assigned someone to focus on Dodd-Frank 1073
• 66 percent of FIs understand the detail of what needs to be done surrounding Dodd-Frank 1073 in advance of the February 2013 deadline
• 76 percent of FIs feel there will be a negative impact on their consumer payments business due to Dodd-Frank 1073

The webinar also reviewed specific requirements of DFS1073:

• Full fee disclosure at the time of origination
• Guarantee of amount of final funds delivered
• Guarantee on when funds will be received
• Right to cancel a transaction up to 30 minutes after its submission

Earthport said that its service model already addresses many of the transparency and predictability requirements of DFS1073. However, to further improve its current disclosue practices, the company is working with major clients on a program of minor program enhancements:

• Pre-configurable cancellation windows
• Superior upfront validation
• Ensured transparency and disclosure of principal amount and settlement dates

"Our service was designed from the outset with transparency and predictability at its core," said Neil Burton, director of product strategy at Earthport. "We are busy working with banks to ensure that our service fits within their overall compliance requirements for DFS1073."

For more on this topic, visit the regulatory issues research center.