# How can real-time payments be secured?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2018-06-18
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Understanding Real-Time Payments & Account-Based Fraud
Meta Description: Discover how real-time payments are revolutionising the way we move money, while also exploring the security challenges of account-based fraud and the
URL: https://financedigest.com/how-can-real-time-payments-be-securedhtml

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_**David Worthington**, VP, Payments at Rambus_

> In today’s on-demand world, we expect to be able to spend, move and receive money instantly.

For this reason, real-time payments (RTP), also known as ‘faster payments’ or ‘instant payments’, are gaining momentum globally. Accenture estimates that there are now 35 countries with real-time payment schemes in operation or under development.

With account-based fraud on the rise, however, the move from standard to real-time transactions is causing significant security challenges for [central banks](https://www.financedigest.com/climate-change-fight-a-core-duty-for-central-banks-ecbs-villeroy.html "Climate change fight a ‘core duty’ for central banks – ECB’s Villeroy") and clearing houses.

**Understanding account-based fraud**

Most fraudsters will usually follow the path of least resistance.

The success of anti-fraud measures like EMV® chip, EMV 3-D Secure and [payment tokenization](https://www.rambus.com/blogs/what-emv-tokenization-2-0-means-for-the-payments-industry/?utm_source=iseepr&utm_medium=blog) in mitigating card fraud in-store and online means fraudsters are turning elsewhere.

For various reasons, Demand Deposit Account (DDA) credentials, which relate to current, [savings or checking accounts](https://www.financedigest.com/digitised-prize-linked-savings-accounts-how-it-can-encourage-better-financial-habits.html "Digitised prize-linked savings accounts: How it can encourage better financial habits") that are used for direct credit transactions through automated clearing house (ACH) processing, are an increasingly attractive target.

DDA credentials are already stored in their raw form across various locations, such as e-commerce websites, mobile and P2P wallets, invoices and payroll.

While the frequency and [public awareness of ACH fraud is much lower than credit](https://www.financedigest.com/sp-global-fined-1-1-million-euros-for-premature-credit-rating-publications.html "S&P Global fined 1.1 million euros for premature credit rating publications") and debit compromises, the average value of unauthorized ACH transactions is actually much higher. This [creates the potential for very large value](https://www.financedigest.com/how-to-create-value-in-digital-transformations.html "How to create value in digital transformations") frauds, and even systemic attacks against national payment systems.

Despite the threat, many [central banks](https://www.financedigest.com/analysis-powerful-swiss-central-bank-faces-reform-calls-in-wake-of-credit-suisse-rescue.html "Analysis-Powerful Swiss central bank faces reform calls in wake of Credit Suisse rescue") don’t actively monitor some of these types of fraud, with losses below a certain limit written off as a cost of doing business.

The move from standard to real-time transactions adds another layer of complexity and [creates further opportunities](https://www.financedigest.com/tire-materials-market-to-create-an-incremental-opportunity-of-us-99-99-bn-by-the-end-of-2028-fmi.html "Tire Materials Market to create an incremental opportunity of US$ 99.99 Bn by the end of 2028 – FMI") for fraudsters. Quicker transaction [times](https://www.financedigest.com/when-is-the-best-time-for-an-ethereum-transaction.html "When is the Best Time for an Ethereum Transaction?") increase the chances of fraudulent transactions going undetected.

**Faster payments = faster fraud?**

This is because [banks currently rely on a layered approach](https://www.financedigest.com/britains-co-op-bank-confirms-tsb-approach.html "Britain’s Co-op bank confirms TSB approach") combining various techniques. But somewhat surprisingly in today’s automated world, checking payment mandates and unusual [account activity manually remains](https://www.financedigest.com/skin-lightening-products-remain-sought-after-among-women-who-continue-to-account-for-80-of-sales-study.html "Skin Lightening Products Remain Sought-after among Women, who Continue to Account for 80% of Sales: Study") a mainstay of the traditional clearance process.

The problem is, manual review is simply not feasible when the clearance [time for account-to-account transactions is measured](https://www.financedigest.com/the-financial-times-opts-to-partner-with-brand-metrics-for-brand-lift-measurement-globally.html "The Financial Times opts to partner with Brand Metrics for brand lift measurement globally") in seconds, not days.

Importantly, fraudsters recognize the [challenges facing](https://www.financedigest.com/how-to-overcome-the-current-challenges-facing-your-fintech-business.html "How to overcome the current challenges facing your fintech business") banks when transitioning and are ready to exploit any vulnerabilities as soon as a RTP scheme goes live.

[Banks need](https://www.financedigest.com/change-is-inevitable-how-banks-need-to-adapt-to-customers-new-banking-habits.html "Change is inevitable – how banks need to adapt to customers’ new banking habits") to get ahead, be proactive and protect the account data itself, rather than simply be reactive and wait for the fraudsters to strike.

**[Securing real-time payments](https://www.financedigest.com/top-tips-for-securing-softpos-payments.html "Top tips for securing SoftPOS payments") with tokenization**

Enter tokenization.

Tokenization has been hugely [successful in safeguarding payments in-store and online by replacing the consumer’s primary account](https://www.financedigest.com/what-successful-accounting-looks-like-in-the-age-of-the-consumer.html "What successful accounting looks like in the age of the consumer") number (PAN) with a unique payment token that is restricted in its usage, for example, to a specific device, merchant, transaction type or channel.

By removing account numbers from the transaction process entirely, tokenization can significantly reduce the risk and impact of account-based fraud to support the development of a safe and secure [instant payments](https://www.financedigest.com/more-banks-join-european-instant-payments-pilot-from-end-2023.html "More banks join European instant payments pilot from end 2023") framework.

The good news is that tokenization is easily transferable to account-based transactions, is complementary to other anti-fraud measures, and is easily compatible with [existing systems](https://www.financedigest.com/computerized-physician-order-entry-cpoe-systems-market-to-generate-profitable-avenues-for-existing-companies-as-well-as-new-players.html "Computerized Physician Order Entry (CPOE) Systems Market to Generate Profitable Avenues for Existing Companies as Well as New Players").

**Account data, faster and safer**

For banks, ACH fraud represents a bigger financial [risk than card fraud and is going to become harder to manage](https://www.financedigest.com/extended-reality-applications-in-risk-management.html "Extended Reality Applications in Risk Management") as real-time payments become the norm. The ecosystem [must work](https://www.financedigest.com/why-employers-rocked-by-the-great-resignation-must-keep-working-mothers-on-board.html "Why employers rocked by the Great Resignation must keep working mothers on board ") to mitigate fraud before it has been attempted. Tokenization, therefore, is primed to [play a pivotal role](https://www.financedigest.com/the-role-embedded-finance-systems-will-play-as-commerce-goes-increasingly-digital.html "The Role Embedded Finance Systems Will Play as Commerce Goes Increasingly Digital") within the broader security mix.

_To learn more about real-time payments and how to secure them, download the_ _Rambus eBook._


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