The Land Down Under is introducing New Payments Platform (NPP), the modestly-named and soon-to-be-launched system that will enable almost instantaneous transactions between banks and bank accounts, any day of the week.
With convenience comes a level of jeopardy. Finder.com.au insights manager Graham Cooke told The New Daily that the new platform could expose consumers to fraud risks.
“While the NPP will provide value to consumers, it may also expose people to fraudulent transactions,” he said.
“With an instant payment platform, banks may have less time and fewer resources to check for fraudulent transactions which could see a rise in financial fraud.”
The article goes on to mention a report in November 2016 from the Bank of International Settlements, which warned that real-time payments “may be a more attractive target for fraud than traditional retail payments.”
Not surprisingly, NPP Australia CEO Adrian Lovney offered reassurances.
“Whenever there are new developments in payments, security will always be questioned,” he told The New Daily. “NPP Australia and the participants who will offer payments via the platform are treating security as an absolute priority.
“Banks, credit unions and building societies that use the platform must have the capability to detect and respond to fraudulent activity in a real-time environment.”
The Australian government’s online scam watchdog, Scamwatch, reports that Australians have lost $65 million in online scams this year alone, with 122,000 scam reports being submitted. Clearly, America is not alone in balancing its quest for quick and convenient payment structures vs. maintaining the level of security offered in paper-originated payments.
Overall, payment systems are moving to real-time, and so must fraud prevention measures. This is an area where improvements in check fraud can be made. Many of today’s tools are still focusing on batch / Day 2 decision processes; mainly due to traditional overnight posting systems. The challenge for financial institutions is to find a blend of real-time tools which complement Reg CC and posting timelines. It’s a great topic that we’ll be addressing with our OrboGraph Fraud Survey results in the upcoming weeks.