Faster Payments

ACH Faster Payments Stress Fraud Protections

Faster Payments Security

Faster payments may be speeding up transactions for consumers, but it may also be putting pressure on the systems banks have in place to fight fraud.

According to American Banker, faster ACH payments are impacting the ability of banks to review transactions for fraud.

It’s no surprise that cybercriminals are eyeing the opportunity.

With credit-based ACH payments now being settled within the same day, many financial institutions are unable analyze suspicious transactions in such a shortened timeframe. While banks work to catch up with the new turnaround time when it comes to fraud protection, fraudsters are jumping at the opportunity to take advantage of the vulnerability.

“Recently we’ve seen more evidence of incidences of ACH fraud than we have in the past,” Andrew Davies, a VP at Fiserv, told American Banker. Davies noted that there’s been an increase in cases of malicious software impacting ACH files to perpetrate fraud.

“A lot of their fraud filters will not necessarily have the wherewithal to break out all the transactions, look at history of the accounts on the incoming and outgoing side, look at the batches within the file and then look at the behavior associated with the overall file from an ACH perspective,” he said.

Not only is the threat growing, but it’s also more difficult to recover money stolen in this manner.

“Anytime you push money out, it’s really hard to pull it back,” Ruston Miles, founder and chief innovation officer of Bluefin Payment Systems, explained. “If it’s a payroll file, the money has been pushed out, and you can’t go out to the customer and pull it back.”

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 AML/KYC Tracker provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

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