Real-time payment fraud: are bank-level controls enough anymore?

TL;DR: Fraud in real-time payment systems can move through mule accounts and multiple institutions in minutes, leaving investigators with only a partial view of where funds go and making single-bank case handling increasingly ineffective, according to Feedzai. The shift from institution-level defence to network-level intelligence is becoming the decisive control point.

Editorial analysis by NHI Mgmt Group, based on content published by Feedzai: “Vanishing Without A Trace: How Fraud Slips Between Banks”.

By the numbers:

• In the Philippines, Trace coverage reaches around 99% of the national real-time network.

Key questions

Q: What fails when payment fraud is investigated only inside one bank?

A: The investigation usually fails at the point where the money leaves the first institution, because the full transfer chain is already distributed across other ledgers.

Q: Why do real-time payment rails make scam recovery so difficult?

A: Because the fraud moves in minutes, while many response processes still depend on manual review, counterpart outreach, and case-by-case investigation.

Q: How can banks tell whether network-wide fraud sharing is working?

A: Look for whether a confirmed fraud event at one institution produces actionable signals at others before the same funds or accounts are reused.

Practitioner guidance

• Build cross-institution fraud tracing Define how confirmed scam transactions are propagated to partner institutions so the next hops can be traced before funds disappear into new ledgers.
• Standardise mule-account signals Use common confidence levels, transaction descriptors, and escalation triggers so partner banks can act on the same suspicious account patterns consistently.
• Shorten internal fraud decision cycles Remove handoff delays between detection, investigation, and external notification so the bank does not lose the recovery window while waiting for manual review.

Bottom line: Real-time payment fraud now exploits the gap between how quickly money moves and how slowly many institutions can investigate it.

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