Bank Transfer PayNote
This PayNote brings programmable, conditional logic to traditional A2A bank transfers (ACH, wire, SEPA) while maintaining the bank's existing compliance and control infrastructure.
Core Structure
Payer
Account holder at bank
Payee
Recipient (may be at same or different bank)
Guarantor
Bank (traditional financial institution)
Currency
Fiat (USD, EUR, GBP, etc.)
What Makes It Unique
This PayNote brings programmable, conditional logic to traditional A2A bank transfers(ACH, wire, SEPA) while maintaining the bank's existing compliance and control infrastructure.
Key Innovation: Customers authorize transfers with built-in business rules. The PayNote coordinates when to trigger standard bank operations—the bank's infrastructure doesn't change.
How the Three Parties Interact
The PayNote creates a shared workspace where all three parties can see the same information and coordinate actions transparently.
When a customer initiates a conditional transfer:
- They create a PayNote defining the rules (e.g., "pay after delivery confirmed").
- The bank reviews and approves participation.
- From that point forward, the PayNote tracks everything automatically.
Each party contributes to the process:
- Customer can request cancellations or modifications.
- Vendor can confirm delivery, submit invoices, or trigger payment.
- Bank processes standard operations (reserve, capture, decline) and records outcomes.
Customer
- Creates the PayNote defining the rules, like "pay after delivery confirmed".
- Can request cancellations or modifications.
Bank
- Reviews and approves participation before automation begins.
- Processes standard operations (reserve, capture, decline) and records outcomes.
Vendor (Payee)
- Confirms delivery, submits invoices, or triggers payment.
- Sees the same real-time state as the other parties.
Everyone sees the same truth: All parties have real-time visibility into the current state—what's been requested, what's been approved, what's been captured. No more phone calls asking "where's my payment?" or "did the bank approve this?"
For the bank, this means: You receive standard payment requests (reserve funds, capture funds) that route through your existing operations. You respond with confirmations or decline reasons. The PayNote handles all the coordination, timing, and transparency automatically.
See How It Works
Simple Payment Example
Immediate reserve and capture on creation; understand the basics of conditional bank transfers.
Payment on Delivery
Reserve funds now and capture after shipment confirmation—see how delivery conditions integrate with PayNotes.
Payment with Trial Period
Offer guaranteed refunds during trial windows with clear milestones and automated releases.
Example Use Cases
Construction Progress Payments
Reserve full project amount upfront. Release funds in stages as building inspector confirms milestone completion. All approvals recorded in shared timeline.
Equipment Leasing
Three-stage payment: deposit on order, payment on delivery, final payment after installation verified. Vendor has payment certainty throughout.
Invoice Financing
Payment automatically scheduled for Net-30 date. If buyer disputes before then, automatic hold for resolution. Evidence-based dispute handling.
Corporate Treasury Multi-Approval
Large international wires require CFO + Controller signatures. No transfer until all approvals recorded. Transparent approval chains.
AI Agent Spending
Give AI agent authority to pay vendors within rules: "Pay invoices under $5,000 from approved vendor list after delivery confirmed." Human oversight for exceptions only.
Recurring Service Payments
Each month, when service provider submits completion report, trigger reserve and immediate capture for that month's fee. Automated recurring payments with evidence.
Value Proposition
For Banks
New Revenue Streams
- Premium fees for conditional transfer service.
- Transaction fees on milestone-based releases.
- Additional charges for multi-party approval workflows.
- Monetize added value vs. standard wire transfers.
Reduced Risk & Disputes
- Shared evidence timeline prevents "I never authorized this".
- Complete audit trail for every transaction.
- Easier fraud detection with business context visible.
Competitive Differentiation
- Offer programmable transfers while competitors don't.
- Attract commercial customers needing sophisticated treasury management.
- Enable AI agent banking safely (major upcoming market).
For Businesses (Payers)
Operational Efficiency
- Automate complex payment approval workflows.
- Eliminate manual payment operations overhead.
- Reduce treasury team workload (manage by exception only).
AI Agent Integration
- Safely delegate spending authority to AI agents.
- Set programmatic limits and approval rules.
- Full auditability of agent actions.
Flexible Reservation
- Reserve funds only when needed (better cash flow).
- Or reserve upfront for vendor certainty (their choice).
- Programmatic control over timing.
For Vendors (Payees)
Payment Certainty
- See when funds are reserved (guarantee kicks in).
- Clear visibility into what's needed for release.
- Predictable cash flow for forecasting.
Reduced Collection Effort
- No more "when will I get paid?" inquiries.
- Automatic release when conditions met.
- Faster dispute resolution via shared evidence.
Bank Operations & Risk Controls
What You See:
Standard payment requests flow through your existing systems:
- Reserve funds requests (hold amount in account).
- Capture funds requests (execute ACH/wire transfer).
- Release reservation requests (remove hold).
You process each through normal banking operations and provide responses (confirmed, declined with reason).
Your Risk Controls Still Apply:
Every request goes through your standard security stack:
- AML screening - Check compliance.
- Velocity limits - Enforce daily/monthly caps.
- Fraud detection - Flag suspicious patterns.
- Sanctions screening - Block prohibited parties.
- Balance verification - Confirm funds available.
If any check fails, you decline the request with a reason code. The PayNote handles the rest—notifying all parties and updating the status.
Compliance Benefits:
PayNotes create automatic audit trails:
- Complete documentation: Every request, approval, and outcome recorded.
- Purpose transparency: Transfer reason explicitly stated.
- Approval chains: All multi-party sign-offs preserved.
- Dispute evidence: Full history available for investigations.
- Regulatory reporting: Easy export for examiners.
What Changes Operationally:
Minimal. You monitor for incoming payment requests and respond through your existing infrastructure. The PayNote handles coordination, notifications, and state tracking automatically.
FAQ for Bank Decision Makers
Do we need to change our core banking system?
No. PayNotes sit above your existing rails. You still execute ACH and wires the same way—PayNotes just coordinate when to trigger them based on business conditions.
What about regulatory compliance?
PayNotes enhance compliance. Every action is automatically documented with timestamps and cryptographic verification. Your AML/KYC processes remain unchanged—you just have better audit trails.
Are we locked into a vendor?
No. The PayNote specification is an open protocol. You can start with managed services for rapid deployment, then migrate to self-hosted infrastructure whenever you want. Documents remain fully portable.
How do customers create these PayNotes?
Initially through templates you provide in your banking interface. Later, customers can use third-party tools to create custom PayNotes. You review and approve participation just like you approve any transfer authorization today.
What happens if our systems are down?
Just like today—transfers don't execute during downtime. Requests queue up and you process them when systems return. No lost transactions, complete continuity.