An overwhelming majority of US banks expect new regulations on cross-border transactions to have a negative impact on their payments business, according to a report by US headquartered transaction banking solutions provider Fundtech.
Dodd-Frank Section 1073 will be implemented this year, mandating transparency around costs, timing and repudiation for consumer cross-border transfers. However, 90% of banks surveyed said regulation would have little benefit for consumers.
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When asked whether the regulation will deliver the intended benefit to the consumer, 52% of banks questioned stated that it would have a negative impact. Only 2% of banks felt that the regulation would deliver the intended benefits.
Dodd-Frank 1073 mandates that consumers are given 30 minutes to cancel cross-border transactions. However, only 2% of banks stated that consumers cancelling orders was a frequent occurrence. Of those banks that knew the frequency, 43% stated that consumers never cancelled orders.
Tony Salamone, US banking product manager at Fundtech, said the survey showed the new regulation would be a "major compliance challenge in 2013".
He added: "At Fundtech we recognise the unique challenges presented by Dodd-Frank and are working with clients to help them comply with new mandates, creating disclosures and isolating consumer transfers to comply with the 30 minute cancellation policy".
