2023 New York Laws › UCC - Uniform Commercial Code › Article 4-A - Funds Transfers › Part 4 - Payment › 4-A-405 - Payment by Beneficiary's Bank to Beneficiary.

Section 4-A-405. Payment by Beneficiary's Bank to Beneficiary.
(1) If the beneficiary's bank credits an account of the beneficiary of
a  payment  order, payment of the bank's obligation under subsection (1)
of Section 4-A-404 occurs when and to the extent (i) the beneficiary  is
notified  of  the  right  to withdraw the credit, (ii) the bank lawfully
applies the credit to a debt of the beneficiary,  or  (iii)  funds  with
respect  to the order are otherwise made available to the beneficiary by
the bank.
(2) If the beneficiary's bank  does  not  credit  an  account  of  the
beneficiary  of  a  payment  order,  the time when payment of the bank's
obligation under subsection (1) of Section 4-A-404 occurs is governed by
principles of law that determine when an obligation is satisfied.
(3) Except as stated in subsections (4) and (5), if the  beneficiary's
bank  pays  the  beneficiary  of  a  payment  order under a condition to
payment or agreement of the beneficiary giving the  bank  the  right  to
recover  payment  from  the  beneficiary  if  the  bank does not receive
payment of the order, the condition  to  payment  or  agreement  is  not
enforceable.
(4)  A  funds-transfer  system  rule may provide that payments made to
beneficiaries of funds transfers made through the system are provisional
until receipt of payment by the beneficiary's bank of the payment  order
it  accepted.  A  beneficiary's  bank  that  makes  a  payment  that  is
provisional under the rule is entitled to refund from the beneficiary if
(i) the rule requires that both the beneficiary and  the  originator  be
given  notice  of the provisional nature of the payment before the funds
transfer is initiated, (ii) the beneficiary, the beneficiary's bank  and
the  originator's  bank  agreed  to  be bound by the rule, and (iii) the
beneficiary's bank did not receive payment of the payment order that  it
accepted.  If  the  beneficiary  is  obliged  to  refund  payment to the
beneficiary's bank, acceptance of the payment order by the beneficiary's
bank is nullified and no payment by the originator of the funds transfer
to the beneficiary occurs under Section 4-A-406.
(5) This subsection applies  to  a  funds  transfer  that  includes  a
payment  order  transmitted  over  a funds-transfer system that (i) nets
obligations multilaterally among participants, and (ii) has in effect  a
loss-sharing  agreement  among participants for the purpose of providing
funds necessary to complete settlement of the obligations of one or more
participants that do not  meet  their  settlement  obligations.  If  the
beneficiary's bank in the funds transfer accepts a payment order and the
system  fails  to complete settlement pursuant to its rules with respect
to any payment order in the funds transfer, (i) the  acceptance  by  the
beneficiary's  bank  is  nullified  and  no  person  has  any  right  or
obligation based on the  acceptance,  (ii)  the  beneficiary's  bank  is
entitled  to  recover  payment from the beneficiary, (iii) no payment by
the originator to the beneficiary occurs under Section 4-A-406, and (iv)
subject to subsection (5) of Section 4-A-402, each sender in  the  funds
transfer  is  excused from its obligation to pay its payment order under
subsection (3) of Section 4-A-402 because the  funds  transfer  has  not
been completed.