Faster Payments doesn’t mean More Fraud
Are faster payments too fast for their own fraud good? What seems a boon to payments may be a liability, at first glance. Speed means less time at hand to ensure that payments are on the up and up and that they are getting to the right people or entities at the right time.
But in a qualitative study of nearly two dozen financial institutions that drive 66 percent of the ACH volume, NACHA found that fraud attempts and success, scaling as some would think, along with same-day payments functions, simply wasn’t there.
In a PYMNTS.Com interview with Karen Webster, Jane Larimer, Executive Vice President at NACHA, said that the organization has gone out and surveyed 23 financial institutions, which comprise about 66 percent of ACH origination volumes, and asked whether they have seen any increase in fraud due to Same Day ACH.
“And zero percent, nobody, said yes,” she said.
And in fact, Larimer added, some of these firms have seen articles in the press speculating on fraud increases and have notified NACHA that they themselves have not seen any trends to that effect, at least as can be tied directly to same-day activities.
The conventional wisdom is, however, that the faster money moves, the less time there is to react, Webster said. But NACHA has been working with financial institutions over an 18-month period so that the latter entities could put any increased fraud detection measures in place at the upfront to mitigate any problems related to speed.
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