Latest news with #electronicpayments
Daily Mail
a day ago
- Business
- Daily Mail
Major change to Social Security checks coming within weeks
Social Security checks will soon no longer be delivered by mail and recipients must act fast to register for electronic payments. The change comes as part of an executive order issued by President Donald Trump that will make all federal payments such as Social Security and tax refunds strictly electronic. Beneficiaries who still receive paper checks have until September 30 to sign up for direct deposits or another electronic payment option. The White House said the move will prevent fraud and reduce government costs. Paper checks are more than 16 times more likely to be reported stolen or lost compared to electronic transfers, according to government data. Physical checks are also more likely to be returned deliverable or altered, the figures suggest. Discontinuing paper checks could result in annual savings of $750 million, according to First Citizens Wealth. The change will affect those who receive retirement benefits, Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). Recipients can provide a bank account or credit union for direct deposits or an approved pre-paid debit card. Registration can be completed at the government's Go Direct website that helps Americans with their electronic payments. The US Treasury is also willing to make a handful of exceptions for those with no access to banking or electronic payments or those experiencing extreme hardship. All exceptions must be approved by the US Treasury on a case-by-case basis. Government contractors, including businesses and individuals paid by the federal government, will also need to register for electronic payments. Companies or individuals can enroll their business for direct payments on US Treasury sites or Businesses that are already enrolled are urged to ensure their account information is accurate to avoid any delays or complications. The rising cost of health care and new legislation affecting benefits has moved up the timeline that bosses expect Social Security and Medicare programs to run short of funds. Social Security relies on its trust funds to provide monthly benefit checks to around 70 million Social Security and Medicare are now projected to run out of money by 2033 Both programs are now expected to run out of money in 2033, according to the latest annual report. The date is now three years earlier than last year's estimate. Once the funds are exhausted, beneficiaries would still receive payments, but at reduced levels. Medicare would be able to cover just 89 percent of hospital costs, while Social Security could pay only about 81 percent of promised benefits. Trustees say the latest findings show the urgency of needed changes to the programs, which have faced dire financial projections for decades.
Yahoo
4 days ago
- Business
- Yahoo
Fed's ISO ‘big bang' hits next week
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Financial institutions that seek to send payments via the Federal Reserve's Fedwire Funds Service must migrate to a new international standard come Monday. That's when banks are required to begin using the ISO 20022 standard for electronic payments they choose to send over that Fed real-time settlement rail. While the central bank delayed an implementation deadline multiple times, after a preliminary 2023 proposal, it says this one is for real. The Geneva-based International Organization for Standardization gave the world the ISO 20022 standard over two decades ago to encourage financial institutions around the world to embrace a more modern messaging system. Some 70 countries have already adopted the standard that provides operational efficiencies, more data-sharing and less outdated batch-processing. The shift will allow banks around the world to communicate, share data and operate by the same rules for cross-border payments, said Elias Ghanem, the global head of consulting firm Capgemini's Research Institute for Financial Services. The change has a host of implications for international commerce, he explained during an interview. Global payments are 'deep and complex,' said Ghanem, who formerly worked for Visa and PayPal Holdings.'It is essential that we all speak the same language. We harmonize the data. We harmonize the rails.' The Federal Reserve already put its new real-time payments system FedNow on the standard when it was launched in 2023. The bank-owned Clearing House also has its private real-time rail, the RTP network, using the ISO standard. The new standard will be particularly important for banks and credit unions seeking to send cross-border payments because many foreign financial counterparts already use the standard. The Fedwire channel handles some $4.7 trillion in worldwide commerce every day, with international commerce mainly conducted in U.S. dollars. 'This is a massive upgrade for the entire payment industry,' said Finzly CEO Booshan Rengachari. 'It is an upgrade for the entire world mainly because the dollar is the global currency.' Charlotte, North Carolina-based Finzly is a software provider to financial institutions that has been working to make sure its clients are prepared for this moment. It's not a gradual transition, but rather a 'big bang conversion' that happens Monday when the Fed shifts the Fedwire service to the new standard, Rengachari explained. It's the biggest event to happen in payments during his decades-long career in financial services, Rengachari said. The new standard not only allows banks and their clients more agility and efficiency in pursuing business opportunities, it also helps them work together to thwart threats, Ghanem said. 'We all reduce risk,' Ghanem said. 'We all fight together.' Most major U.S. banks are prepared for the Fed shift to ISO 20022, though some smaller institutions in the U.S. may not be, Ghanem said. If they haven't been able to implement the technology upgrade themselves, presumably they're working with an outside vendor to do so, he said. Mihail Duta, a director at financial services software provider Finastra in New York, said he also believes that most U.S. banks are prepared for the new standard. His London-based company, with a U.S. headquarters in Lake Mary, Florida, has been working with both the Federal Reserve and financial institutions to get them ready. 'We've touched every single customer to ensure that the right software is in place, that they've done their testing, that they have everything they need to process,' Duta said. While there could be some outlier situations with snafus, said Duta, he added that he doesn't expect any major banking disruptions on Monday. 'Given all the prep work and all the diligence that was done, I think it's unlikely that something dramatically wrong will go on July 14,' he said. To brace for any potential mishaps, Finastra is advising its financial institution clients to start a little earlier than usual on Monday to give themselves more processing time to 'work through any wrinkles,' he said. 'All providers, including the Fed, are thinking the same way: It's all hands on deck,' Duta said. 'I can tell you, from a Finastra perspective, nobody's taking off July 14.' That's the case for Rengachari's crew too. In fact, the company has reservations at nearby hotels for some of the firm's 200 employees that will be working more hours than usual. One of the key benefits of the technology associated with the new standard is its ability to carry more data with a given transaction. For instance, international purchase orders can carry documents, like an invoice, and more information about a particular shipment. The reports that banks can generate regarding those transactions will also benefit from the richer data, as will their fraud-fighting capabilities, Duta said. 'The foundation has been laid for a major transformation, and that's going to be a good thing for the entire industry,' Rengachari said. Regional U.S. banks that don't adopt the standard immediately may be less troubled because they're mainly focused on local transactions, Ghanem said. Mainly, it could mean delays for some payments, he said. But being in tune with the global payments ecosystem is ultimately important for all U.S. financial institutions, and may give those banks that are up-to-date on the standard an edge, he said. The new ISO standard links to payments systems run by different organizations, such as the Belgium-based international cooperative Swift, allowing them to better communicate with each other. Swift, which is a messaging system for global payments, has allowed users a more gradual conversion to the ISO standard, but is also moving toward a November 22 deadline to complete that transition. As for the Fedwire milestone Monday, Rengachari said he's confident it will go smoothly, after what he expects will be a busy weekend. 'If anything doesn't go the way it is planned, we will be there to make sure things are back on track,' he said. Rengachari has also prepared to celebrate Monday after the transition is complete, lining up a bottle of champagne to be opened. Clarification: The story has been updated to clarify that the Fed hadn't previously postponed the ISO standard implementation deadline set in its final notice. It had previously contemplated earlier implementation dates before the final notice. Recommended Reading Fed delays start of new Fedwire standard
Yahoo
04-07-2025
- Business
- Yahoo
AICPA submits recommendations for transition to EFDS
The American Institute of CPAs (AICPA) has submitted recommendations to the Department of the Treasury concerning the transition to an electronic federal disbursements system (EFDS), as mandated by Executive Order 14247, Modernizing Payments To and From America's Bank Accounts. The order stipulates that all federal payments should be processed electronically by ceasing issuance of paper checks by 30 September 2025 and aims to enhance efficiency and security while reducing costs. The AICPA supports the move towards electronic payments but highlights the challenges it poses, particularly for taxpayers without a US bank account. This includes seniors and the unbanked population, who may be excluded from the system due to international banking regulations that restrict automated clearing house transfers with non-US financial institutions. The AICPA's letter references a Treasury Inspector General for Tax Administration report indicating that nearly seven million taxpayers received refunds through non-electronic means in the latest tax year. The AICPA's recommendations include exceptions for individuals and entities not based in the US or without a US bank account, and exemptions for temporary non-US individuals. It also suggests expanding the capabilities of the Electronic Federal Tax Payment System to allow business accounts to process payments on behalf of individuals, and delaying the implementation for trusts and estates until the IRS can address specific administrative issues. Furthermore, the AICPA proposes guidance for applying exceptions for qualified taxpayers, extending the timeframe for implementing the order, seeking statutory authority for the mandates, and involving stakeholders in establishing the rules for the transition. AICPA senior manager for Tax Policy & Advocacy Daniel Hauffe said: 'For many years, the AICPA has advocated for and supported the modernisation of the IRS and its payment systems; although this executive order is a step in the right direction, there are many considerations before implementing changes, which means updated processes and carefully tailored rules will need to be developed.' 'The AICPA's recommendations allow for the modernisation of the IRS' tax payment systems while mitigating the impact of the administrative burden on taxpayers, tax practitioners and the IRS, that could be caused by this executive order.' In June 2025, the AICPA also expressed concerns regarding the pass-through entity tax state and local tax (SALT) deductions in recent reconciliation bills. "AICPA submits recommendations for transition to EFDS" was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Finextra
02-07-2025
- Business
- Finextra
US bank groups call for quick transition as Treasury phases out paper cheques
A trio of bank groups has written to the US Department of the Treasury urging it to move quickly in ditching paper cheques for electronic payment options. 1 In March, President Donald Trump ordered the US federal government to phase out the use of paper cheques and to centralise payment processing in an effort to crack down on fraud. In an executive order, Trump said the use of paper cheques and money orders into and out of the United States Government Fund "imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies". The US Treasury followed up the executive order with a request for information, which the Bank Policy Institute, The Clearing House Association and the Consumer Bankers Association have now responded to, urging prompt action to fully transition to secure, modern electronic payment methods and minimise the use of cheques. 'Removing paper Treasury checks from circulation is an important step toward reducing theft and the related losses to the federal government and financial institutions,' the groups write. 'Treasury's efforts to phase out paper checks in government payments represent a critical opportunity to modernize America's payment infrastructure, reduce fraud and increase financial security for American taxpayers.' They are calling for a public awareness campaign to educate Americans on electronic payments, an expansion of the government's use of existing electronic payment platforms, and an investment in fraud detection tools such as ID verification.
Zawya
19-06-2025
- Business
- Zawya
Egypt: CBE issues licensing rules for payment system operators, service providers
The Central Bank of Egypt (CBE) has issued new rules for licensing and registering payment system operators and payment service providers, in line with law No. 194 of 2020 regulating the banking sector, as per an announcement. The move comes as part of the CBE's efforts to keep up with the rapid growth of electronic payments and ensure the provision of secure and accessible financial services across Egypt. The rules outline the procedures and conditions for licensing institutions, whether based in Egypt or abroad, that offer payment services or operate payment systems for customers in Egypt. Covered services include cash deposits and withdrawals from payment accounts, execution of payment transactions and fund transfers, issuance of payment instruments and e-acceptance channels, domestic remittance services in EGP, payment order creation, and account information services. The framework sets out the documents and criteria required for obtaining prior approval, including minimum capital requirements, licensing conditions, procedures for license amendments, financial guarantees, and applicable inspection and oversight fees. A transitional period of 12 months has been granted for currently operating payment institutions to apply for licensing under the new rules. These institutions will be allowed to continue operating during this period until their status is reviewed and decided upon by the CBE's Board of Directors. The rules also cover licensing conditions for foreign-based payment institutions that offer services to users in Egypt, provided they are regulated by the relevant authority in their home country. The rules define the scope and terms under which these entities may operate. © 2020-2023 Arab Finance For Information Technology. All Rights Reserved. Provided by SyndiGate Media Inc. (
