Real-Time Payments Fraud Detection: How Businesses Can Prevent Fraud When Sending Instant Payments

When you send an ACH or wire transfer, you typically have a small window to fix a mistake. If you send money to the wrong recipient or enter the wrong amount, there are steps you can take to stop or reverse the payment before it reaches the recipient’s account. Reversals and cancellations are possible because there is a delay between when a payment is initiated and when funds are deposited, ranging from a few hours to a few days. But what happens when a payment settles almost instantly?

Real-time payments are growing in popularity due to their speed and low cost. However, one often overlooked difference with real-time payments is that they are final once sent. While this means less room for reversal, it also creates more certainty around when funds are delivered. With the right controls in place, businesses can take advantage of that speed without increasing risk.

In this guide, we will walk through how to prevent fraud and payment errors when sending real-time payments. We will cover common fraud schemes that target businesses, what to do if you detect suspicious activity, and how to address issues before they escalate. We will also explain how to get the most out of real-time payments with Slash.¹ With Slash, not only can you send real-time payments across RTP and FedNow networks, but you can also control how and when money moves through customizable approval workflows, user permissions, and built-in monitoring.

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What are real-time payments?

Real-time payments are exactly what they sound like: bank-to-bank transfers that are initiated, cleared, and settled within seconds. Funds are made available to the recipient almost immediately, and confirmation is delivered in real time. Unlike ACH or wires, these payments run 24/7, including nights, weekends, and holidays.

In the U.S., there are two real-time payment networks: RTP, operated by The Clearing House, and FedNow, operated by the Federal Reserve. While RTP and FedNow function similarly, there are a few differences. RTP is a private network with broader current reach, while FedNow is a public system designed for wider access across banks and credit unions. The networks are not interoperable, meaning both the sender and recipient must be on the same rail for a payment to go through. For most businesses, access to both networks is the best way to maximize coverage.

The main tradeoff with real-time payments is speed versus reversibility. Because payments settle instantly, they cannot be canceled or reversed after they are sent. This makes them great for time-sensitive transactions, but it also means businesses need strong controls in place before initiating a payment.

The best use cases for real-time payments include:

Urgent vendor payments that cannot wait for ACH or wires
Capturing early payment discounts with faster settlement
Off-cycle payroll or contractor payouts
Sending money outside of banking hours, including nights and weekends
Instant refunds or customer payouts
More precise cash flow timing and liquidity management

How does fraud occur with real-time payments?

Fraud involving real-time payments often starts the same way as any other payment scam. A fraudster might impersonate a trusted colleague, use phishing tactics to gain access to sensitive information, or manipulate payment details at the last minute. The tactics used to initiate real-time payment fraud are not necessarily more sophisticated; what’s different is how difficult it can be to recover funds once the payment is sent.

With ACH payments, there is some buffer time for a bank to review your transaction. The ACH network is governed by Nacha, which sets rules and standards to help protect payments. Because ACH transfers typically take one to three days to settle, banks have time to verify account details, flag suspicious activity, or stop a transaction before it completes. If something looks wrong, the payment can be returned with an ACH return code explaining why it was rejected.

That safeguard does not exist with real-time payments. Transactions are processed and settled within seconds; once a payment is completed, it is final. The only way to recover funds is to request them back from the recipient, which is unlikely in cases of fraud.

When it comes to real-time payments, prevention matters more than recovery. By understanding common fraud tactics and putting controls in place before sending a payment, businesses can significantly reduce the risk of sending money to the wrong party.

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The most common types of real-time payment fraud

Real-time payment fraud schemes are largely the same as those used in other digital payment methods. The key difference is that with real-time payments, you have far less opportunity for recourse once funds are sent. Understanding the common tactics fraudsters use can help you spot suspicious behavior early, before it’s too late. Here are four common schemes:

Authorized payment push fraud

Authorized payment push (APP) fraud occurs when a fraudster tricks someone into willingly sending a payment to the wrong account. This often involves impersonation, such as posing as a vendor, executive, or bank representative, and creating a sense of urgency to push the payment through. The request may look legitimate, with realistic invoices, email threads, or payment instructions that closely mirror normal business activity.

Account takeover fraud

Account takeover (ATO) fraud happens when a fraudster gains unauthorized access to a legitimate account, often through stolen credentials, malware, or compromised devices. Once inside, they can initiate payments, change account details, or reroute funds without immediately raising suspicion, since the activity appears to come from a trusted user.

Business email compromise fraud

Business email compromise (BEC) fraud involves a fraudster gaining access to or spoofing a legitimate business email account to request payments or change payment instructions. These messages often appear to come from executives, finance team members, or vendors, and may reference real transactions or ongoing conversations to appear credible.

Phishing and social engineering attacks are tactics used to manipulate individuals into revealing sensitive information or taking specific actions. Common examples include fake login pages that mimic your bank or accounting software, emails that appear to come from a vendor asking you to “re-authenticate” your account, or phone calls from someone posing as your bank’s fraud team requesting a one-time passcode. In some cases, fraudsters may even reference real transactions or company details to make the request feel legitimate.

These tactics are often the entry point for more direct fraud. Stolen credentials can lead to account takeover, while convincing a user to follow urgent payment instructions can result in authorized payment fraud.

How fraud detection works in real-time payments

With advancements in network technology and fraud detection, there are more effective ways to identify suspicious behavior and stop fraudulent real-time payments before they are completed. While the best defense is still preventing mistakes at the source, modern systems can analyze transactions in milliseconds, flag high-risk activity, and intervene before funds are sent. These systems typically rely on a combination of the following approaches:

AI and machine learning for payment risk scoring

AI and machine learning models evaluate each transaction in real time and assign a risk score based on patterns learned from historical data. These models consider factors like transaction size, recipient history, device information, and known fraud signals to determine whether a payment is likely to be legitimate.

Behavioral analytics and anomaly detection

Behavioral analytics focuses on how users typically interact with their accounts, such as login patterns, payment timing, and typical transaction amounts. If a payment deviates from normal behavior, like a first-time recipient or an unusually large transfer, the system can flag it as anomalous and require additional review.

Real-time interdiction and decisioning

Because real-time payments settle within seconds, fraud detection systems must make decisions instantly. Real-time interdiction allows platforms to pause, reject, or require authentication for suspicious transactions before they are finalized, preventing funds from leaving the account.

Data enrichment and cross-channel intelligence

Data enrichment adds context to transactions by pulling in additional information, such as account history, external risk signals, or known fraud databases. Cross-channel intelligence connects signals across email, login activity, and payment behavior, allowing systems to detect coordinated fraud attempts that might not be obvious from a single transaction alone.

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Fraud prevention controls you can take before sending real-time payments

Real-time payments are most effective when used thoughtfully and with the right controls in place. By combining good judgment with internal safeguards, you can reduce risk while still benefiting from instant transfers. Here are some practical steps to take:

Know when to use real-time payments: It can be tempting to use real-time networks for every transaction, but they should not always be your default. For first-time payments or when you are unsure about where funds are going, consider using ACH to establish the relationship first. With Slash, you can also set user-level permissions to control who can send payments, which can reduce the risk of costly mistakes.
Set up approval workflows: Require multiple approvals for high-value or first-time payments. Slash allows you to configure approval chains so high-value payments require the appropriate sign-offs before being sent. This adds a layer of verification that can help catch errors or fraudulent requests.
Adjust account limits: Set per-transaction and daily limits for real-time payments based on your business activity. Lower limits can reduce potential losses if fraud occurs, while still allowing flexibility for routine transactions. You can also apply stricter limits to new payees or higher-risk payment scenarios.
Identify regular payees: Maintain a list of verified, trusted recipients and flag or restrict payments to new or unverified accounts.Slash automatically saves verified banking and contact details, making it easier to reuse trusted recipients and avoid manual entry errors.
Implement KYC or AML checks: Use Know Your Customer (KYC) and Anti-Money Laundering (AML) processes to validate counterparties before transacting. This can include verifying business identities, screening against sanctions lists, and confirming account ownership to reduce the risk of sending funds to fraudulent entities.
Configure real-time alerts: Enable instant notifications for payment activity, including initiated, approved, and completed transactions. Real-time alerts help your team quickly spot unusual behavior and respond before additional payments are made.

How Slash gives you control over every payment

Slash gives businesses the tools to move money in real time without sacrificing control. With support for both RTP and FedNow, you can reach more recipients across the U.S. banking system while relying on built-in safeguards at every step. User-level permissions let you control exactly who on your team can initiate real-time payments, while configurable approval workflows ensure high-value or first-time transfers get the right sign-offs before funds leave your account. Saved contacts with automatic OFAC screening help verify recipients upfront, reducing the risk of sending money to the wrong party.

Behind the scenes, Slash monitors every outbound transaction and can flag or hold suspicious activity for manual review before it settles, giving your team a chance to intervene even on real-time rails. Combined with transaction limits, real-time notifications, and a complete audit trail of every payment, Slash helps you take advantage of instant settlement with the same level of oversight you would expect from traditional payment methods.

Whether you are sending urgent vendor payments or managing recurring payouts, Slash enables you to move quickly while maintaining control. With Slash, you can also benefit from:

Business banking built for control: Open unlimited virtual accounts to separate operational funds to give teams clearer visibility into cash flow. Manage multiple business entities from a single dashboard, with consolidated reporting and clear visibility across accounts.
Accounting & ERP integrations: Sync transaction data with QuickBooks Online, Xero, or Sage Intacct to streamline reconciliation, reporting, and month-end close.
Slash Visa® Platinum Card: A corporate charge card that earns up to 2% cash back on company spending, with configurable spending rules, card controls, and encryption-grade fraud protection.
Diverse payment methods: Slash supports a wide range of payments, including card spend, global ACH, international wire transfers to over 180 countries via SWIFT, and real-time domestic payments through RTP and FedNow.
Native cryptocurrency support: Convert funds into USD-pegged stablecoins such as USDT or USDC to send transfers on the blockchain, offering a near-instant international payment method with reduced fees and settlement times.⁴

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Frequently asked questions

What happens after real-time payment fraud is detected?

If you determine an instance of fraud after a real-time payment is sent, there is limited ability to reverse the transaction. The next steps typically involve contacting your bank as quickly as possible and attempting to recover funds from the recipient.

Is real-time payment fraud more difficult to detect than fraud on other payment rails?

Real-time payment fraud is not necessarily harder to detect, but it must be identified much faster since transactions settle within seconds. This makes proactive monitoring, strong controls, and real-time alerts more important than on slower payment rails like ACH.