What are the risks associated with real-time payments?

What are the risks associated with real-time payments?

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Title
What are the risks associated with real-time payments?

Summary
Most payment modalities–including ACH, cards and checks–offer a way for the person making the payment to dispute, recall or stop a payment before or after it’s processed.

With the RTP® network, all participants have agreed that once an RTP transaction is initiated, that transaction is final and irrevocable.

The RTP network is based on a “good funds model” and is currently a “credit push” payment system. A good funds model means participating banks are required to have funds available at the Federal Reserve at the time they initiate transactions. Sending financial institutions are not able to revoke or recall a payment once it has been authorized and submitted to the RTP network.

Sending financial institutions can ask a receiving bank to send back a payment initiated in error, but the receiving bank is not obligated to honor the request.

The finality of an RTP transaction allows participants to consider a payment complete without having to wait days or hours for the funds to actually become available. This also means that end users need to be vigilant about not sending payments in error or exposing their credentials to potential fraudsters.

Please read this blog post for more information about the risks associated with real-time payments.

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