Real-time payment networks can improve cash flow and customer experience. Their speed also changes the window available to detect scams and recover funds.
Speed changes the economics of a payment
A bank transfer that arrives within seconds can solve a very ordinary problem: a worker receives earnings sooner, a business pays a supplier on time or a household avoids a delay between accounts. Instant payment systems have been developed to make that speed available outside traditional banking hours. In the United States, the Federal Reserve's FedNow Service supports instant payments through participating financial institutions around the clock [1]. The service passed 1,800 participating institutions in July 2026, according to Federal Reserve Financial Services [2]. Participation is a measure of network reach, not proof that every customer at every participating bank can initiate every type of instant payment.
Why fraud becomes a timing problem
Faster settlement reduces the period during which errors or suspicious instructions might be spotted before money moves. A particularly difficult category is authorised push payment fraud, in which someone is manipulated into approving a transfer. The account holder may have authenticated the payment, yet the reason for sending it was false. Research from the Federal Reserve Bank of Kansas City explains how fast availability of funds and the limited reversibility of many fast payments make these scams attractive to criminals [3]. The policy challenge is not to make every transfer slow; it is to place better checks where they can prevent harm.
The risk is wider than one bank
Fraudsters can route activity across accounts and financial institutions, making suspicious patterns difficult for one provider to see. The Bank for International Settlements' Project Hertha, conducted with the Bank of England, explored whether transaction analytics could help identify coordinated financial crime patterns in real-time retail payments while using a limited set of data [4]. It was a research project, not evidence that one detection system can stop every scam. It nevertheless illustrates why banks may need to think beyond isolated account-level alerts when designing financial-crime controls.
The customer experience dilemma
Strong verification can prevent losses, but intrusive checks can also frustrate legitimate customers. A payment that is delayed every time a person pays a new supplier loses some of its value. Risk-based approaches attempt to balance these competing interests. Signals may include an unusual new beneficiary, inconsistent account information, an atypical transfer amount or signs that a customer is being pressured. None of those indicators alone proves fraud. Banks need appropriate escalation procedures, clear explanations and ways for customers to raise concerns without being trapped in an opaque automated decision.
Businesses have responsibilities too
Corporate treasury teams should not assume that a fast payment is equivalent to a verified payment. Changes in supplier bank details are especially sensitive. An apparently legitimate invoice can be accompanied by altered instructions after an email account is compromised. Independent confirmation through an established contact channel, separation of duties and appropriate approval thresholds are practical controls. Reconciliation after funds leave remains necessary, but it is a poor substitute for preventing a fraudulent transfer in the first place. The European Payments Council's 2025 review identifies social engineering, third-party risks and other payment threats, and considers controls across initiation, authentication and execution stages [5].
Trust is the real adoption test
The case for instant payments is compelling, but growth should not be assessed only by transaction counts or processing time. Institutions also need to evaluate scam losses, false positives, customer support and dispute handling. A sound system lets legitimate money move quickly while recognising that speed is valuable only when users trust the process. As instant payments become more routine, the differentiator may be less about how fast the network settles and more about how effectively the surrounding controls identify a payment that should never have been sent.
References
[1] Federal Reserve Financial Services, FedNow Service participants and service providers
https://www.frbservices.org/financial-services/fednow/organizations/
[2] Federal Reserve Financial Services, Soaring volume, participation mark three years of the FedNow Service, July 2026
https://www.frbservices.org/news/fed360/issues/soaring-volume-participation-three-years-fednow-service/
[3] Federal Reserve Bank of Kansas City, Combating Authorized Push Payment Scams in Fast Payment Systems, November 2024
https://www.kansascityfed.org/research/payments-system-research-briefings/combating-authorized-push-payment-scams-in-fast-payment-systems/
[4] BIS Innovation Hub, Project Hertha, June 2025
https://www.bis.org/publications/project-hertha-identifying-financial-crime-patterns-real-time-retail-payment-systems
[5] European Payments Council, Payment Threats and Fraud Trends Report, 2025 update
https://www.europeanpaymentscouncil.eu/document-library/reports/2025-update-payment-threats-and-fraud-trends-report
