Australians soon to enjoy instantaneous money transactions must be wary of fraud, a finance expert has warned.
The New Payments Platform (NPP) is the soon-to-be-introduced system that will enable transactions between banks and bank accounts to happen almost instantaneously, whether it’s Monday or Saturday.
Identifiers such as an email address and phone numbers can be used to send funds, allowing people to quickly transfer money to any bank account in Australia.
In the past, consumers would have to wait until Monday if they had sent their friend some money on Saturday, but the platform’s instant speeds are also feeding calls for caution.
Finder.com.au insights manager Graham Cooke told The New Daily the new platform could expose consumers to fraud risks.
“While the NPP will provide value to consumers, it may also expose people to fraudulent transactions,” he said.
“With an instant payment platform, banks may have less time and fewer resources to check for fraudulent transactions which could see a rise in financial fraud.”
Some experts say with instant payments in real-time or near real-time, once money is gone it’s gone.
A report in November 2016 from the Bank of International Settlements warned that real-time payments “may be a more attractive target for fraud than traditional retail payments”.
The UK launched its own version of the NPP in 2008, called Faster Payments. However, Faster Payments has been subject to a series of frauds associated with the platform.
One such fraud is criminals capitalising on the instant nature of the transactions where fake stores pass off branding and logos from genuine websites or offering a ‘buyer protection’ on transactions sent through Faster Payments like people might use on PayPal.
Finder.com.au in its latest RBA economist survey found 77 per cent of panellists considered fraud a legitimate concern of the NPP.
But NPP Australia CEO Adrian Lovney flatly rejected the accusations.
“Whenever there are new developments in payments, security will always be questioned,” he told The New Daily.
“NPP Australia and the participants who will offer payments via the platform are treating security as an absolute priority.
“Banks, credit unions and building societies that use the platform must have the capability to detect and respond to fraudulent activity in a real-time environment.”
Mr Lovney said fraud was front of mind when developing the NPP and that banks were already engaged in warning Australians of the risks.
But he did warn that Aussies do need to be careful to ensure they weren’t defrauded outside the NPP in romance scams or people pretending to be from the ATO.
“It’s important to remember that payments via the New Payments Platform are specifically authorised by a customer, who must log in to internet banking and authorise a payment to a third party.”
But he did concede Australians would be responsible for their own online safety.
“Consumers should always be vigilant about their data regardless of what payment method they choose to use,” he said.
The Australian government’s online scam watchdog, Scamwatch, reports that Australians have lost $65 million in online scams this year alone, with 122,000 scam reports being submitted.