Reality Check: Fact vs. Fiction in Real-Time Payments Fraud

Faster payments are gaining traction, but fraud fears haven’t kept pace with facts. Convinced that speed invites scams, many banks in the United States remain hesitant about fully embracing real-time rails such as the RTP^® network and the FedNow^® Service. This fear persists—even though it’s outdated. Today’s instant rails offer stronger fraud defenses than checks, wires or automated clearing house (ACH). Still, stubborn myths about payment speed and its attendant risks shape how financial institutions (FIs) act. Too many try to “play it safe” by offering receive-only service, bottlenecking adoption and limiting faster payments’ value. It’s time for a reset. Clearing up misperceptions could unlock real-time payments’ broader benefits—from better customer experience to lower fraud exposure.

• Fraud Fears Still Hamper Real-Time Payments Adoption
• Fraud on the RTP^® Network and FedNow^® Remains Rare
• Fraud Prevention Tools Win Bank Support
• Turning the Page on Faster Payments Myths

Fraud Fears Still Hamper Real-Time Payments Adoption

Fear of fraud remains one of the biggest hurdles to real-time payments adoption. Many banks limit participation to receive-only mode, driven by concerns that speed increases exposure to scams and fraud risk.

Banks’ fear of fraud in instant payments is widespread—and growing.

In fact, fraud’s ranking as a hurdle to real-time rails adoption saw the biggest increase this year, climbing to fourth place from ninth in 2024, though this was still relatively low, cited by 26% of FIs. Of all the named obstacles to instant payments implementation, fraud followed fierce competition from FinTechs at number one (36%), the challenge of needing to offer 24/7 availability at number two (34%), and the difficulty of updating architecture and internal systems at number three (28%). Researchers noted that the rise of fraud concerns as a barrier makes sense as banks come to grips with the actual operation of instant payments after focusing almost exclusively on structural challenges until now.

Amid rising financial fraud, robust protection is essential.

The 2025 Faster Payments Barometer found that the specific fraud fears surrounding real-time payments adoption mirror those in the financial industry at large. At 35%, account takeover fraud ranks as the top worry regarding instant payments, followed closely by authorized push payment (APP) fraud, such as scams that trick users into sending money, at 30%. Other risks—including synthetic identity and invoice fraud—draw more moderate urgency (10% to 15%). Meanwhile, so-called money mule activity—when fraudsters use individuals to transfer stolen funds—occupies a lower yet still significant tier of concern, at less than 5%.

These apprehensions suggest that FIs should prioritize authentication and customer education to address both the technical and the human weaknesses that fraudsters exploit. However, many institutions are taking the less rational approach of forgoing adoption altogether.

Opting out of instant payments serves no one.

Fears tied to authorized sender fraud—especially on platforms like Zelle, where it has drawn regulators’ attention—are shaping real-world choices, with many banks adopting receive-only functionality to reduce exposure. According to the 2025 Faster Payments Barometer, 78% of all surveyed organizations planned to begin their implementations with receive-only capabilities, whereas just 22% intended to launch full send-and-receive services.

The assumption behind these decisions? “Faster payments equal faster fraud.” That myth still shapes how institutions act, even as today’s rails tell a different story. FIs that limit engagement due to a lack of confidence in their defenses only create a bottleneck that constricts adoption across the banking ecosystem.

Fraud on the RTP^® Network and FedNow^® Remains Rare

Despite these anxieties, current fraud rates on faster payment rails are significantly lower than for traditional payment systems. Real-time transactions face less fraud than checks, wires or ACH—yet many institutions still view them as riskier.

Legacy rails face higher fraud risk than real-time payments.

Those findings reflect how fraudsters target older systems that move high volumes while lacking modern safeguards. Real-time networks, by contrast, often run in tokenized API environments that improve transaction security and access control. Real-time payments networks allow only push payments, where the account holder must send the transaction. This is unlike other payment types, such as ACH, where pull (debit) payments are allowed.

Checks still dominate payments despite high fraud exposure.

Checks remain widely used, despite persistent fraud risks. Although nearly two in three institutions experienced check fraud in 2024 and nearly one in four incidents involved stolen mail, 75% of firms still plan to keep using checks over the next two years. Instant payments are often better protected, but that advantage still hasn’t revolutionized institutional behavior.

Meanwhile, the government is taking action against the tidal wave of check fraud. The U.S. Treasury and banking groups are fast-tracking the digitization of federal checks per an executive order ahead of a September deadline. This move, which specifically recommends real-time payments as a safer alternative, is a crucial step in the government’s broader efforts to safeguard federal payments against fraud.

“Removing paper Treasury checks from circulation is an important step toward reducing theft and the related losses,” top banking associations said in a recent joint letter to the Treasury regarding the order.

Most fraud cases tied to RTP and FedNow are low-impact.

Moreover, the severity of fraud’s impact on faster payments is often limited. According to the Faster Payments Barometer, just 3% of financial institutions report real-time payments’ fraud impact as “significant.” Most incidents are categorized as “slight” or “moderate,” and a large portion of FIs report zero impact. These findings suggest that current controls are working, though sustained investment is still needed to stay ahead of evolving threats.

Fraud Prevention Tools Win Bank Support

Financial institutions must raise awareness of real-time payments’ strong fraud prevention tools to encourage broader adoption. Many FIs already support advanced solutions—and U.S. real-time rails are fully on board, launching their own initiatives.

Banks back stronger fraud defenses—but broader adoption is needed for them to work.

Such a system has already proven effective at combating APP fraud in the United Kingdom, where its mandate has resulted in a 60% reduction in fraud cases. However, for tools like CoP to work, bank participation must be near-universal. The concern is that partial adoption of this tool, as in the fragmented U.S. real-time payments market, would simply reroute fraud to banks that are not covered.

The top five tools banks say they need.

RedCompass Labs asked U.S. banks which fraud prevention measures they consider most urgent. Leading the list: artificial intelligence (AI) and machine learning (ML) (40%), followed by real-time detection (39%) and multifactor authentication (MFA) (35%). Data sharing among banks (32%) and coordination with telecom and tech firms (27%) round out the top five.

All five strategies aim to stop fraud before funds move. Confidence is growing in technology’s potential to achieve just that, with 54% of U.S. big banks this year believing AI can improve financial crime detection, up from only 31% overall last year.

TCH and the Fed step up fraud defense.

Banks that participate in the major U.S. real-time networks, meanwhile, will find these rails’ defenses already robust and gaining strength. The Clearing House and the Federal Reserve have each launched new fraud mitigation tools for the RTP network and FedNow, respectively. These include real-time monitoring, collaborative data exchange and the Fed’s ScamClassifier model—a framework for tracking scam types and patterns. These efforts matter. With the measures’ continued success fueling more bank participation, the U.S. could quickly become a leader in the real-time payments race.

Turning the Page on Faster Payments Myths

Even as fraud rates remain low, persistent myths about risk are slowing real-time payments adoption. To move forward, stakeholders must confront the perception gap, equipping institutions and consumers alike with the tools and clarity needed to build trust at scale.

• Fraud is still a top concern—but not the top threat. Just 2% of firms report fraud on real-time rails, versus 63% on checks.
• Risk is concentrated, not constant. Account takeover and push payment scams top the threat list, yet most fraud events have limited impact on faster payment rails.
• CoP-style ID checks have near-universal support. Ninety-six percent of banks want them—but coverage must be consistent to close gaps.
• Technology works best when paired with collaboration. Banks rank AI, MFA and real-time monitoring highly—but also want stronger data sharing.
• Network operators are stepping up. RTP and FedNow are expanding real-time defenses and scam-tracking frameworks.

Real-time payments have reached an inflection point. While risk won’t disappear entirely anytime soon, the tools to manage it are mature, tested and widely endorsed. Widespread instant payments adoption now depends on better communication, smarter coordination and closing the trust gap.

The RTP network’s design, with push-only payments and instant confirmations, has kept unauthorized fraud rates among the lowest in the industry. In April, just 123 fraudulent transactions occurred out of 35 million—a rate that is far below other payment types. While authorized fraud, such as scams, remain a broader challenge across all payment types, participating banks on the RTP network are adding good friction—such as confirmation prompts—to protect customers without slowing the real-time experience.”