Finality of payment

Finality of payment,

Definition of Finality of payment:

  1. In finance, the term "finality of payment" refers to the moment at which funds, recently transferred from one account to another, officially become the legal property of the receiving party.

  2. Generally speaking, it is very rare for individual bank account holders to be concerned with whether and when the funds deposited to their account are officially their property. Most people assume that this moment occurs whenever the funds become visible in their accounts.

  3. Once money has been received or deposited into a vendors account, the transaction is considered final.

How to use Finality of payment in a sentence?

  1. The concept is mainly familiar to institutional account holders, who often are more exposed to counterparty risks.
  2. Finality of payment is the moment at which recently transferred funds become the legal possession of the receiving party.
  3. During financial crises, finality of payment can have important implications for the liquidity of financially vulnerable firms.

Meaning of Finality of payment & Finality of payment Definition