A payment can be authorised, processed and shown as successful long before it has legally settled. The industry measures Time-to-Confirmation. It should be measuring Time-to-Finality.
In this contributed article, Sofia Khatsernova is legal function owner at xpate, discusses the “Success” status on a payment screen, and how it is often treated as the end of a transaction.
Once the confirmation appears, users generally assume the money has arrived, ownership has transferred, and the payment is complete. Yet in many cross-border payments, that assumption is not entirely accurate. A payment can be authorised, processed, and displayed as successful long before final settlement has occurred within the underlying payment infrastructure.
This creates what can be described as a “settlement gap”: a period in which a payment appears complete from a technical perspective while legal settlement is still taking place behind the scenes. As global payments systems continue to evolve, it is becoming clear that “Time-to-Confirmation” alone does not capture the full picture, as it may overlook the complexities of settlement risk that persist after a payment is initiated.
The illusion of success and the ownership gap
Part of the confusion stems from the fact that payment systems and user interfaces often measure different things. A transaction may be marked as successful because a payment instruction has been received, validated, and routed correctly through the relevant financial infrastructure. However, at this stage, the payment may exist as a confirmed transaction without yet being a legally settled asset. This creates a disconnect between what the user sees and the legal status of the transaction.
In practice, interfaces often present message acceptance and settlement finality as if they were the same thing. This distinction is easy to overlook because modern B2B payment platforms and consumer payment products are designed to prioritise speed and simplicity. The user sees a confirmation message, while the legal, operational, and settlement processes continue in the background. As payments evolve, the focus needs to shift from Time-to- Confirmation to Time-to-Finality, so that a “Success” message reflects the actual status of the transaction rather than simply confirming that a payment instruction has been processed.
The Citibank and Revlon payment dispute illustrates how technical execution and legal reality do not always align. In August 2020, Citibank, acting as agent on a Revlon credit facility, intended to send an interest payment and instead transferred roughly 900 million dollars of its own money to lenders. What began as an operational error became a legal battle over whether the funds should be returned. A district court ruled in February 2021 that the recipients could keep the money. That ruling was reversed by the Second Circuit in
September 2022, the funds were returned, and the case was dismissed with prejudice in January 2023. The successful execution of a transaction and its final legal status were separated by nearly two and a half years.
This becomes even more significant when intermediaries are involved. During the settlement process, a payment may have been processed, but the recipient may still depend on the banks, payment institutions, and payment solutions involved in completing settlement. In some cases, what exists during this period is effectively a claim against an intermediary rather than access to fully settled funds. In practical terms, access to funds and legal ownership do not always move at the same pace.
The collapse of Synapse Financial in 2024 brought these issues into focus. When reconciliation and record-keeping problems emerged, customers were left questioning where funds were held, who was responsible for them, and what protections applied. The episode demonstrated how quickly questions of ownership, access to funds, and intermediary responsibility can move from theoretical concerns to real-world problems.
Part of the challenge stems from a mismatch in infrastructure. Many underlying clearing and settlement systems were not designed for the real-time experiences that businesses now expect. While digital banking interfaces may update instantly, actual settlement processes continue in the background. In many cases, the user experience moves faster than the settlement process itself.
The risks that remain before final settlement
A payment may appear complete from a user’s perspective, but risks can remain until settlement is finalised. Operational disruptions, regulatory compliance issues, or intermediary failures can still affect the outcome of a cross-border transaction.
The G20 Roadmap for Enhancing Cross-Border Payments reflects broader industry recognition that faster payments alone do not address all challenges associated with cross-border transactions. Regulatory initiatives are increasingly focused on reducing these risks while improving the speed and transparency of payments. One example is Verification of Payee, which is being introduced as part of broader fraud prevention efforts to confirm that the recipient’s details match those of the intended account holder before a transfer is completed.
While these checks improve security, they also reinforce a broader shift within the industry: speed alone is no longer enough. As payment systems become faster, reducing fraud, meeting regulatory requirements, and improving payment certainty have become just as important as moving money quickly.
The challenge now is managing the gap between what customers see and what happens behind the scenes. The customer sees a completed transaction, while checks, controls, and settlement processes may still be underway. Understanding where responsibility sits at each stage of the payment lifecycle becomes increasingly important as the gap between technical confirmation and legal finality narrows.
Beyond the success message
The industry has spent years reducing the time between initiating a payment and receiving confirmation. The next step is reducing the gap between confirmation and final settlement.
Bridging this gap requires moving toward atomic technical and legal settlement, where the digital payment message and the legal transfer of ownership occur together rather than as separate events.
Shifting the focus from Time-to-Confirmation to Time-to-Finality means designing payment infrastructure so that a “Success” message reflects the true status of a transaction, not simply the successful transmission of a payment instruction. That brings technical confirmation closer to legal settlement, and reduces the gap between what users see and what has actually happened.
About the author
Sofia Khatsernova is legal function owner at xpate. She is a legal expert specialising in cross-border fintech and digital finance. At xpate she oversees the legal function, navigating complex regulatory frameworks to support international payments and acquiring services. She has experience in both private practice and in-house roles.
The post Why ‘Success’ Does not Always Mean Settlement in Cross-Border Payments appeared first on The Fintech Times.
