This book is a comprehensive, easily-referenced guide to understanding and managing the risks typically encountered by business organizations in the United States as they make and receive payments. An understanding of these risks has become necessary in today’s environment, as evolving technologies, new laws and procedures, and the problems of check and electronic fraud have become inextricably intertwined.

Managing the Risks of Payment Systems is written for corporate executives, treasurers, funds managers, controllers, auditors, bankers, and their respective legal counsels. This book provides a basic understanding of the risks of the payment systems, how the law allocates those risks among the payor, the payee, and the collecting and paying banks, and how to best manage those risks. As the authors declare in Chapter One: "We didn’t know" is no excuse.

The authors explain how to develop procedures to control the payment system risks and how to maintain and protect the legal rights of the parties to banking agreements. Chapters discuss:

• Checks and the risk of fraud
• Wire transfers and liability for fraud and errors
• The risks in the automated clearinghouse (ACH) system
• Commerce and payments in cyberspace
• How to identify and manage corporate payment system risks, including systems disruptions, backup, and physical security

The authors invite readers to chat at www.paymentsystemsrisks.com.

Includes bibliographical references (p. 225-226) and index.

Identify and manage payment risk

The risks of payment systems have dramatically evolved…new laws, new technologies, new threats combined with the chronic problems of error, fraud, and security. Treasury and banking executives and their counsel ignore these risks at their peril. "We didn’t know" is no excuse.

Managing the Risks of Payment Systems is the up-to-date, practical, authoritatively complete guide to managing the risks of payment systems. These risks are identified and described, and "how to manage" these risks is explained. Some examples are:

• Check fraud problems
• Wire transfers and liability for fraud and errors
• Automated clearinghouse payments (ACH) and its rules
• Who is liable for what?
• Do’s and don’ts for banking agreements
• Commerce and payments in cyberspace–security, money laundering, privacy rights
• Payment systems disruptions, backup, physical security

The coauthors are recognized authorities. This book consolidates their professional and practical experience into a comprehensive and reliable desk reference.

PAUL S. TURNER is the author of numerous articles and books, including Law of Payment Systems and EFT and "Negotiating Wire Transfer Agreements: A Guide for Treasury Executives, Bankers & Attorneys." He practices banking and commercial law and consults on legal matters, with offices in Los Angeles, California. He first became familiar with the risks of payment systems as a lawyer at Occidental Petroleum Corporation, where as an assistant general counsel he advised the Occidental treasury department. He was an official advisor to the uniform law commissioners who wrote Article 4A (Funds Transfers) of the Uniform Commercial Code (UCC) and revised UCC Articles 3 (Negotiable Instruments), 4 (Banks Deposits and Collections), and 5 (Letters of Credit). He has served as a member of the Payments Advisory Group of the Association for Financial Professionals and is vice chair of the American Bar Association’s Payments Committee, a subcommittee of the Association’s Business Law Section. He is the coauthor, with Diane and Brooke Wunnicke, of Standby and Commercial Letters of Credit, Second Edition.

DIANE B. WUNNICKE is a veteran corporate finance manager and consultant, with offices in Denver, Colorado. She was introduced to corporate payment systems risks in the 1970s while working on the first online savings and loan customer systems for a large financial institution. During the 1980s to mid-1990s, as the finance and funds manager for a global energy company, she tested and used every new cash management product that would help both domestic and international multicurrency payment operations. Her articles and books include Corporate Financial Risk Management: Practical Techniques of Financial Engineering. She is also the coauthor, with Paul Turner and Brooke Wunnicke, of Standby and Commercial Letters of Credit, Second Edition.