Next year Canada will launch the Real-Time Rails – this is a significant step in Payments Canada’s modernization program. Real-time payments offer significant benefits to consumers and businesses, but they are not risk-free. Experience from other countries that have real-time payments demonstrates that criminals will take advantage in a variety of ways.
Countries that already have real-time payment schemes have had to manage the related crime. Currently there is little to suggest that Payments Canada has taken steps to stop this happening with the Real-Time Rails.
The ‘Modernization Target State’ lays out Payments Canada’s vision for the future and it does talk about fraud prevention. The references are vague, however: “centralized fraud and risk management capabilities” are referenced but the nature of this protection is not defined. It is difficult to understand what format they’ll take, which types of fraud they’ll address or what access payment service providers will have to centralized fraud protection.
Additionally, there is nothing publicized about the liability model that will be taken, particularly in the case of authorized push payment fraud. In the UK, the thorny issue of who should bear the losses when people are tricked into making payments to criminals lead to consumer group Which! launching a super complaint. The regulators are now looking to shift some of the liability from the customers to the banks, and a similar move has been made in Sweden. In Canada if banks are pushed to take liability then losses could be significant; if they don’t take liability they’ll still have issues related to bad publicity and reputational damage.
Fortunately, other countries have had real-time payment schemes for a while – the most widely adopted is the UK’s Faster Payments scheme, which is a decade old. This means that Canada can learn from early adopters about the fraud that happens and the protection that can be deployed.
Read our white paper ‘Canadian Payments - Adapting Fraud Strategy to the Real-Time Rails’ to understand more about fraud in a world of real-time payments and the solutions that can help.