Up: Payment Risk Events
See also: Compliance Gaps

What is a Liability Horizon?

Definition

A liability horizon is the period after a transaction during which reversal or dispute remains possible.

Why it matters

It determines:

reserve requirements
payout delays
accounting treatment
capital exposure

Examples

Card disputes: 120–540 days
ACH returns: up to 60 days
BNPL defaults: months
Fraud claims: variable

Breakdown modes

underfunded reserves
premature payouts
unexpected clawbacks

Where observability fits

maps exposure windows
aligns funds to risk
forecasts release timing

FAQ

Does settlement end liability?

No. Settlement only moves funds, not responsibility.

Are horizons fixed?

No. They vary by network and product.