The surge of faster payments systems has inadvertently paved the way for a surge in fraudulent attacks. With new technology and faster payments coming to the forefront, fraudsters are tapping into vulnerabilities found within these schemes.
A key contributor to the surge in attacks lies in the very nature of faster payments, which involve speed and irrevocability. When payments are processed and settled in real time, users have little chance to detect the attack and reverse the transaction once it is initiated.
Furthermore, the rise of faster payment adoption among businesses and consumers gives fraudsters a wider pool to fish from, which will mean more losses in the near future.
Financial institutions must familiarize themselves with the various types of fraud to formulate the most effective strategies to mitigate attacks. Some of the most common forms of fraud are ACH payment fraud, check fraud, account takeover, and fake-merchant fraud.
As technology revolutionizes the payment landscape, FIs must play defense against potentially significant losses as well as subsequent losses of customer trust and loyalty.