§ 554.12406

554.12406 Payment by originator to beneficiary — discharge of underlying obligation. 1. Subject to section 554.12211, subsection 5, and section 554.12405, subsections 4 and 5, the originator of a funds transfer pays the beneficiary of the originator’s payment order atthe time a payment order for the benefit of the beneficiary is accepted by the beneficiary’sbank in the funds transfer and in an amount equal to the amount of the order accepted by thebeneficiary’s bank, but not more than the amount of the originator’s order. 2. If payment under subsection 1 is made to satisfy an obligation, the obligation is discharged to the same extent discharge would result from payment to the beneficiary ofthe same amount in money, unless the payment under subsection 1 was made by a meansprohibited by the contract of the beneficiary with respect to the obligation, the beneficiary,within a reasonable time after receiving notice of receipt of the order by the beneficiary’sbank, notified the originator of the beneficiary’s refusal of the payment, funds with respect tothe order were not withdrawn by the beneficiary or applied to a debt of the beneficiary, or thebeneficiary would suffer a loss that

r of the beneficiary’s refusal of the payment, funds with respect tothe order were not withdrawn by the beneficiary or applied to a debt of the beneficiary, or thebeneficiary would suffer a loss that could reasonably have been avoided if payment had beenmade by a means complying with the contract. If payment by the originator does not resultin discharge under this section, the originator is subrogated to the rights of the beneficiaryto receive payment from the beneficiary’s bank under section 554.12404, subsection 1. 3. For the purpose of determining whether discharge of an obligation occurs under subsection 2, if the beneficiary’s bank accepts a payment order in an amount equal to theamount of the originator’s payment order less charges of one or more receiving banks in thefunds transfer, payment to the beneficiary is deemed to be in the amount of the originator’sorder unless upon demand by the beneficiary the originator does not pay the beneficiary theamount of the deducted charges. 4. Rights of the originator or of the beneficiary of a funds transfer under this section may be varied only by agreement of the originator and the beneficiary.

iary theamount of the deducted charges. 4. Rights of the originator or of the beneficiary of a funds transfer under this section may be varied only by agreement of the originator and the beneficiary. 92 Acts, ch 1146, §31Referred to in §554.4213, 554.12105, 554.12405 Sat Dec 23 11:02:59 2023 Iowa Code 2024, Section 554.12406 (29, 0)