When speed becomes a risk – Introducing The Paypers' RTP Fraud Series

In today’s fast-paced world, customers and businesses demand payment transactions that are instant, seamless, cost-effective, and transparent.

Over the past decade, the payments industry has transformed its infrastructure to meet these expectations – whether by enabling a small coffee shop to accept payments, facilitating enterprise expenses for business trips, or supporting transactions anywhere, from Mount Everest to bustling city streets. Advancements like smartphones, NFC, Bluetooth, wearables, and digital currencies, combined with evolving industry standards and regulations, have made real-time payments (RTPs) a global phenomenon.

Consumers increasingly demand speed and immediate response times, a trend fuelled by domestic initiatives like FedNow in the US, SEPA Instant Credit Transfer (SCT Inst) in the EU, PIX in Brazil, and UPI in India. On the cross-border side, systems like SWIFT gpi, Visa Direct, Mastercard Send, and fintech solutions such as TransferWise, InstaRem, and RippleNet are leading the way. A Visa and Aite Group survey revealed that 90% of US consumers want the ability to make real-time transfers between their financial accounts.

The appeal of RTPs lies in their instant settlement and irreversibility. This speed boosts cash flow, enhances financial planning, and provides real-time visibility into transactions – benefiting both businesses and consumers. However, this immediacy also attracts fraudsters.

A good example is authorised push payment (APP) fraud, where criminals use social engineering or hacking to impersonate legitimate payees. Since these payments cannot be reversed, victims often struggle to recover their funds. Additionally, the speed of RTPs enables fraudsters to quickly launder stolen money through multiple channels.

To address these vulnerabilities, financial institutions, ecommerce providers, and payment services are continuously developing strategies to detect and prevent fraud, ensuring that the benefits of instant payments can be enjoyed safely.

In response to these challenges, The Paypers is launching a series of editorial pieces on RTP fraud. Our goal is to inform readers regarding the complexities of real-time payment fraud and offer insights for building effective cybersecurity responses.

We will break down the fundamentals of RTP fraud, explaining what it is (across different geographies), how fraudsters exploit these systems, and who is most at risk. Furthermore, we’ll cover effective strategies for mitigating risks and provide practical tips to individuals and businesses to help them avoid falling victim to this fast-growing threat.

Over the next weeks, look out for insights, trends, and best practices shared by leading experts on the complexities of RTP fraud and how to combat it.

Our first instalment, scheduled for 21 November, features Anis Ahmed, who leads the MENA Chapter of ACFCS and is the founder and host of The Fraud Fellas, a forum dedicated to discussing fraud and its societal impact. He will address the looming threat of real-time payment fraud and scams across the globe.

Stay tuned, and enjoy the read!

About Mirela Ciobanu

Mirela Ciobanu is Lead Editor at The Paypers, specialising in the Banking and Fintech domain. With a keen eye for industry trends, she is constantly on the lookout for the latest developments in digital assets, regtech, payment innovation, and fraud prevention. Mirela is particularly passionate about crypto, blockchain, DeFi, and fincrime investigations, and is a strong advocate for online data privacy and protection. As a skilled writer, Mirela strives to deliver accurate and informative insights to her readers, always in pursuit of the most compelling version of the truth. Connect with Mirela on LinkedIn or reach out via email at mirelac@thepaypers.com.