Real-time payment processing - The downside

In the never-ending arms race with fraudsters, faster transactions open the door for faster fraud. 

Currently, NZ banks are technically only liable to cover fraudulent activity when it involves ‘unauthorised’ transactions. Say when someone steals your credit card and makes purchases without your permission. But if someone pretends to be a supplier asking you to update their bank account details in your system (Usually done via business email compromise of your suppliers emails) OR they pretend to be one of your staff asking for funds to be transferred urgently, banks consider that ‘authorised’ and won’t reimburse those funds.”

Banks in New Zealand now process payments in real-time (every hour between 9am - 12 midnight). Because this processing is in real-time, the fraud problem will naturally grow.

A significant shift in the financial landscape occurs at the intersection of real-time payments, fast fraud, and machine learning. What used to be just ideas on paper, including business fraud detection and audit & risk analysis reports, are now realities. With the advent of advanced software (VigilantPay), these concepts are now actionable and within reach today, paving the way for you to have a more secure and efficient business financial ecosystem.

As transformation in the finance sector continues at a fast rate, as business owners and leaders, we have to decide whether to stick with the legacy systems we know and love, (these usually involve a lot of manual processes and time, checked by real people) or move towards new and advanced ways of spotting fraud in real-time. This choice will shape the future of finance in the business world both in New Zealand and Australia.

Credit - Some content and phrasing from an original article by Alex Jimenez.