What Article 4A covers
Article 4A of the Uniform Commercial Code governs funds transfers such as wires and many commercial credit transfers. It sets out when a payment order counts as the customer's own, including orders the customer did not personally send, by reference to a security procedure the parties agreed.
The security procedure test
The question is whether the procedure was commercially reasonable for that customer and whether the bank complied with it in good faith. If so, the customer can be bound even if the order was not what they intended. Law firm Goodwin's June 2026 analysis of agentic payments discusses how this framework applies when an agent acts under delegated authority.
How agents fit
- Credential sharing gives the bank little to point to: the agent looks like the customer, and nothing records what the customer actually authorised.
- A signed mandate records, in the customer's own words and with a strong signature, what the agent may do.
- Human approval for anything outside the mandate shows the customer confirmed the exception.
- An evidence pack shows the bank followed the agreed procedure on each order.
Consumer accounts are different
Consumer electronic fund transfers fall under Regulation E. Goodwin notes that transfers can be presumed authorised once a consumer gives credentials to an agent, while other commentators warn banks could still face error-resolution claims. Because the consumer picture is less settled, business accounts are the clearer starting point.
Practical checklist for counsel
- Is the agent identified separately from the customer?
- Is there a signed, versioned mandate with limits and expiry?
- Do exceptions require a strong customer approval?
- Can the customer and bank revoke access immediately?
- Is there a tamper-evident record per order?
- Does the account agreement describe this as the security procedure for agent orders?