Banks Freeze at ‘Send’ Button Despite Safer Rails

The appeal of instant payments is undeniable. Businesses want faster disbursements, consumers value speed and convenience, and government agencies are turning to real-time rails to modernize payouts.

Yet despite this growing demand, fraud fears continue to cast a shadow over adoption. Many banks remain hesitant to fully embrace instant payments, choosing to limit offerings, at least initially, to “receive-only” services rather than providing the ability for customers to send funds instantly.

Banks Worry About ‘Send’ Fraud

As detailed in a report titled “Reality Check: Fact vs. Fiction in Real-Time Payments Fraud,” done in collaboration between The Clearing House and PYMNTS Intelligence, for financial institutions (FIs), the top concern is not whether fraud exists on instant rails. It does, albeit at far lower levels than legacy payment systems. But banks perceive  particular risks associated with sending funds.

Authorized push payment (APP) scams, where customers are tricked into sending money to fraudsters, dominate conversations. These concerns are amplified by high-profile cases on platforms like Zelle, where regulators have scrutinized banks’ handling of authorized fraud.

A recent RedCompass Labs study, cited in the PYMNTS Intelligence/TCH report, found that 85% of U.S. payment professionals expect fraud to increase as instant payments scale, and 95% of large firms with more than 50,000 employees anticipate becoming bigger targets. As a result, most banks are proceeding cautiously, sometimes to the point of bottlenecking adoption.

Fraud Fears at a Glance

Account takeover (35%) and APP fraud (30%) are the top two fraud worries in instant payments, followed by synthetic identity and invoice fraud (10–15%).

78% of organizations start with receive-only capabilities, while just 22% enable both sending and receiving, reflecting hesitation around outbound fraud risk.

Despite these fears, fraud rates remain minimal: in April, only 123 fraud cases were reported out of 35 million RTP transactions, a fraction of 1%.

Holding Back Instant Payments Adoption

The paradox is striking: Fraud on instant payment networks such as RTP® and FedNow® Service is rare, yet fears about “send” fraud keep many institutions on the sidelines. According to the Association for Financial Professionals, 63% of firms reported check fraud in 2024, compared with just 2% reporting fraud on RTP or FedNow. Checks remain widely used despite being demonstrably riskier, while instant rails with more robust safeguards face skepticism.

Banks’ caution is not without logic. Fraud losses, even if rare, can quickly erode customer trust and trigger regulatory scrutiny. The result, however, is a self-limiting cycle: Fewer banks offering full send-and-receive services means slower adoption across the ecosystem, limiting the benefits of instant payments for businesses and consumers alike.

Building Confidence

Encouragingly, support for fraud prevention solutions is nearly universal. Ninety-six percent of banks back Confirmation of Payee systems, which verify that sender and recipient details match before a transfer is approved. In the U.K., such checks have already reduced APP fraud by 60%. Other measures, including artificial intelligence for anomaly detection, multifactor authentication, and real-time monitoring, rank high on banks’ fraud-fighting wish lists.

The Clearing House and the Federal Reserve are also stepping up. Both have launched new tools, from real-time monitoring and scam classification frameworks to collaborative data-sharing initiatives. These defenses are designed not only to contain fraud but also to build the trust necessary for broader adoption.

Closing the Trust Gap

For instant payments to reach their full potential, FIs will need to bridge the gap between perception and reality. Fraud is not disappearing, but it is far less prevalent on real-time rails than on checks, wires or ACH. By leaning on technology, industry standards, and customer education, banks can scale from receive-only functionality to full participation without compromising safety.

The challenge now is to dispel fraud-focused myths and ensure that send fraud concerns don’t stall the momentum of a faster, more secure payments future.