They also have sufficient time to comply with checks under Anti-Money Laundering regulations and regulations combating the financing of terrorism. As for the third layer – the settlement layer – in instant payments mode, unless instant settlement occurs, payment service providers may have to provide funds to payees before they receive the money from the payer, thus incurring credit risk.
This credit risk would need to be covered – for instance by prefunding or collateralisation arrangements. In any case, it may be necessary to enhance the methods for screening transactions as required by the applicable law on anti-money laundering and on combating the financing of terrorism.