Immediate disbursements are gaining favor in various industries and sectors. They can eliminate the pain points in business-to-consumer (B2C) transactions by keeping consumers from waiting to receive their funds, while businesses are witnessing the advantages of using real-time payments when transacting with each other. Such rapid business-to-business (B2B) payments give buyers better control over their cash flows and spare vendors from waiting for money to settle.
Unfortunately, legitimate users are not the only ones keeping their eyes on immediate transaction options. Offerings like the RTP® network are drawing attention from bad actors as well. Financial institutions (FIs), FinTechs and other businesses that are looking to enable these rapid payments must therefore ensure that their security and fraud-fighting approaches are up to the challenge.
The January Real-Time Payments Tracker® examines how fraudsters seek to compromise and abuse real-time payments systems and how advanced learning tools, robust data analysis and other strategies can help banks and businesses detect, deflect and defuse such attacks.
Around The Real-Time Payments World
FIs are introducing immediate payments to meet customers’ and clients’ demands, but banks and credit unions must ensure that they have the appropriate security approaches in place. This can be difficult, with a recent study finding that 78 percent of banks in the Asia-Pacific region reported rises in fraud after debuting real-time payments services. Advanced analytics technologies could help FIs tackle such issues, however, by making it easier for FIs to detect potential red flags.
Security is top-of-mind for many firms in the United States and appears to be affecting executives’ choices when determining which payment tools to use. Recent surveys found that 38 percent of U.S. financial executives say concerns regarding cybersecurity attacks and payments fraud are holding their organizations back from using digital payments to a greater degree. Stronger security strategies and solutions could help turn the tide and boost adoption.
More businesses are beginning to realize that faster
payments are an increasingly important part of the ecosystems in which they operate, and many are looking to learn more about what such technologies can do for them. Nacha — which governs the Automated Clearing House (ACH) in the U.S. — is seeking to help, and its Faster Payments Project Team is reportedly preparing a resource — called the Faster Payments Playbook for Corporates — to educate businesses. The report is expected to be released during the first half of this year.
Find more on these and the rest of the latest headlines in the Tracker.
Westlake Financial On Safely Speeding Up Auto Financing
Consumers are heading online for fast and seamless shopping experiences, even when purchasing big-ticket items like cars. Customers tapping into digital channels to buy their new vehicles also want their auto financing loans to arrive quickly, which is pushing some lenders to adopt the RTP® network to speed along those disbursements. Financial companies cannot take their payments modernizations lightly, however. Businesses introducing new payment methods must adjust their security approaches to confront potential issues that range from fraudsters launching attacks to unexpected technical difficulties. In the Feature Story, Raul Alvarez, director of accounting operations at auto financing provider Westlake Financial, explains how thorough contingency planning, robust customer onboarding and verification methods and other measures can help auto lenders to safely offer real-time payments.
Check out the story in the Tracker.
Deep Dive: How P2P Payment App Providers Are Fending Off Fraudsters
Peer-to-peer (P2P) payment apps have become increasingly popular among consumers who are trying to quickly and easily transact during the pandemic, but fraudsters have redoubled their attacks against these apps as well. Many bad actors are trying to scam victims into sending them payments via P2P apps, which the consumers are then unable to reclaim. Other cybercriminals attempt to take over users’ accounts and make off with their stored funds or rack up charges to linked bank accounts and payment cards. These issues are making it critical for P2P payment app providers to fight back by keeping bad actors from easily onboarding and ensuring safe transactions for legitimate customers. The Deep Dive examines the various fraud schemes threatening these apps as well as how providers are working to strike back.
Read more in the Tracker.
About The Tracker
The Real-Time Payments Tracker®, a PYMNTS and The Clearing House collaboration, examines how businesses can adjust their approaches to ensure tight security when using immediate transactions.