Real-time fraud detection remains a significant challenge for instant payment systems. What innovative approaches is your organisation implementing to mitigate fraud without compromising the seamless user experience?
John McNaught It is often the perception that AI is managing everything these days, but it is clear that human intervention and intelligence is still critical for identifying risky behaviour. As most machine learning fraud tools are optimised to work on cards, it is crucial to have some level of manual intervention in place to fill in the gaps when a traditional machine learning( ML) model cannot solve a problem.
Amid fraud tools becoming more sophisticated with the use of AI and ML, one of the best ways to mitigate against it in the instant payments landscape is customer verification through using multi-factor authentication( MFA). This is especially the case for new customers, large transactions and high-risk items commonly resold on third party marketplaces.
Using biometric, device-based or behavioural verification when authorising a payment can support in providing a seamless user experience. And to further facilitate convenience and speed, providers should consider allowing repeat customers to use trusted devices so they are not prompted with MFA on each purchase.
Gary Conroy Real-time payments significantly enhance user experience. We’ ve mentioned Verification of Payee in Europe. Confirmation of Payee already exists in the UK, having been mandatory for large UK banks since 2020.
TransferMate extends beyond the UK and Europe, implementing these verification systems across multiple markets today.
This represents just one toolset in our approach. The Authorised Push Payment fraud rules by the Payment Systems Regulator( PSR), covering Faster Payments and CHAPS for payments from personal and micro-enterprise accounts, provide a reimbursement scheme where the onus is on banks and payment service providers to prove gross negligence. This responsibility is split 50:50 between sending and receiving institutions.
To manage this effectively, we need to identify specific patterns such as first-time beneficiary setup, amount limits, and Account Verification results.
Crucially, these checks must be secured in real-time. Rule-setting and AI are key factors in accomplishing this. Where suspected fraud is identified, banks and payment service providers can implement a 72-hour delay to conduct investigations.
80 June 2025