Jun 27, 2023
With the upcoming launch of FedNow, many of our customers have asked us what instant payments such as FedNow and RTP (Real Time Payments) will mean for preventing fraud. You’ve also wanted to know if CertifID fraud protection software, insurance, and services include coverage for RTP transactions.
The TL;DR answer to both of those questions is: CertifID has you covered and now insures real time payments!
Instant payments will provide exciting improvements in terms of greater speed, visibility, and convenience. But that speed also makes verification upfront even more important, before any money is sent.
With a wire transfer, our CertifID fraud recovery services team can often successfully help to claw back funds if a fraud is discovered within a few days (the sooner the better). But with instant payments - that timeframe shrinks to just seconds. Fraud recovery becomes extremely challenging with RTP - placing even more importance on disbursement processes that verify payment details upfront, before any funds are sent.
Recently, I hosted a webinar with experts from US Bank, a leading institution in the development of RTP. We discussed instant payments and what that means for fraud prevention. Below are some of the topics we discussed.
Both are new faster payment rails. RTP has been available since 2017 from The Clearing House, which includes the largest commercial banks in the U.S. FedNow was developed by the federal government and will become available in July 2023. They have similar features and rules. Both are referred to as instant payments.
Over 300 banks and credit unions now support RTP. A sender can send funds to an RTP enabled account, or a receiver can initiate a transaction by sending a “Request for Payment.” Any transaction still requires sharing of banking details. “Request for Payment” is currently available through the participating RTP banks for business accounts only. An RTP transaction will be completed and final within 30 seconds or less.
RTP services support a “Request for Return of Payment” feature, that immediately notifies the sending and receiving institutions and receiver when money is being requested back. It is up to the receiver to authorize the return of the funds in an RTP transaction.
Account name or payee matching is currently not a required field in an RTP payment, although it could be supported in the future.
Due to the speed and irreversible nature of RTP - every transaction should always incorporate an identity and account validation step, prior to any payment.
Yes! You can now use CertifID to verify RTP transactions, just as you do currently with wire transactions. And each RTP transaction verified by CertifID is also covered by up to $1M of insurance.
For more on instant payments and what that means for a title or settlement company - read this informative article from HousingWire.
Here at CertifID, our guidance on how to protect yourself from fraud remains the same. Just as you do today with wire transfers - verify RTP transactions before any funds are sent - whether it’s a mortgage payoff, buyer cash to close, or seller net proceeds.
CertifID will ensure your RTP payment is safe, through verification software and services that evaluate more than 150 markers of fraud, and up to $1M in insurance for every verified transaction.
Please schedule time with us below if you’d like to learn more.
Tyler brings a decade of leadership experience developing and launching technology businesses. Before co-founding CertifID, Tyler led new product development at BCG Digital Ventures for Mercedes-Benz, First American Financial, Boston Scientific, and Aflac.