When manual intervention is still required
There is still the challenge of what to do when the software cannot automatically reject a match as false, and therefore requires human intervention. Possible responses include:
a. Option 1: The Destination Bank accepts the payment but doesn’t credit the recipient until the payment has been manually reviewed. This is problematic, because the Sender would be told the payment has successfully completed, while the Recipient would not see the funds in their account. This can cause confusion and does not meet the requirement for certainty and end-to-end speed that we defined in User Needs of Senders and Recipients and so cannot be the approach used in Nexus.
b. Option 2: Simply reject any payment that triggers an alert, even though it may be legitimate. The Sender is given certainty about the status of the payment but will still be unable to make the payment next time. It may not be possible to give the Sender useful information about how to resolve the match; if they are in fact trying to avoid sanctions, this information could assist them to circumvent the screening software. This approach has been used with some existing cross-border instant payment systems but can lead to a significant percentage of payments being rejected, since many sanction screening software platforms will issue alerts on 10-15% of payments (of which over 90% are likely to be false matches). This approach is most appropriate for time-critical or point-of-sale payments, where the customer cannot leave the store before the payment completes.
c. Option 3: The Sender is told that the payment requires “further checks”, and they’ll be notified as soon as it completes. This means that in some cases, the payment will still not be instant, but will still (in most cases) be successful. It is important to ensure that the Sender has clarity about what is happening and how long the payment is likely to be delayed for. This approach is more appropriate for non-urgent payments, such as transfers to family or payments of invoices for work already done.
While Option 1 should be ruled out, Options 2 and 3 could be appropriate in different circumstances. Local scheme rules may also require one approach over the other.