As financial institutions accelerate the rollout of faster and real-time payment services, they are also facing new fraud challenges that require equally rapid and sophisticated defenses. Research from Mercator Advisory Group highlights how the speed of modern payment systems leaves far less time to detect and stop fraudulent activity, making proactive security measures more important than ever. Technologies such as multifactor authentication, tokenization, real-time account validation, and advanced identity verification are becoming critical tools in protecting transactions while preserving the seamless customer experience that faster payments are designed to deliver.
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Data for today’s episode is provided by Mercator Advisory Group’s report – Faster and Real-Time Payments Fraud.
6 approaches for thwarting real-time payments fraud:
- Multifactor Authentication: initiation occurs on one device and authentication takes place on a separate channel
- Tokenization: sensitive account information masked behind a one-time-use token
- Real-Time Account Validation: verifing state of the account, payment history, ownership, and consistency of personal information
- Standardized APIs: currently each API is developed by each bank – standardizing would allow seamless flow
- Strong Authentication: move beyond knowledge tests with facial recognition, thumbprint, iris scanning…
- Mercator anticipates greater emphasis on validating account and identity vs. assessing the actual transaction
About Report
Financial institutions are implementing or planning new faster payment solutions from same day to real-time transactions and creating roadmaps for new products with faster payment solutions embedded. Simultaneously, attention is being given to protecting faster transactions and preserving the trust customers have in their banks and credit unions to protect their financial transactions. A new research report from Mercator Advisory Group titled Faster and Real-Time Payments Fraud reviews these trends, challenges, and solution.
“At the same time that financial institutions are wrestling with new fraud types and the rise of tactics like business email compromise, they are rolling out new faster payments solutions that innately allow less time to detect criminal activity. The good news is that the security providers are responding with solutions. The implementation and adaptation of these solutions to individual operating environments needs to be the focus,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.
This research report has 15 pages and 3 exhibits.
Companies and other organizations mentioned in this report include: ACH Alert, Brighterion, Early Warning, Experian, Faster Payments Service (U.K.), Feedzai, Federal Reserve, FICO, GIACT, LexisNexis, Mastercard, NICE Actimize, NuData Security, Rambus, RiskRecon, The Clearing House, Verafin, and Visa.
