Checks, Not Instant Payments, Pose the Biggest Fraud Risk

Instant payments adoption continues to rise, but fraud concerns remain a powerful brake on momentum. As artificial intelligence drives more sophisticated attacks, businesses and financial institutions (FIs) are reassessing how risk factors into real-time money movement. While speed and liquidity are widely recognized benefits of instant payments, many organizations remain cautious, questioning whether real-time rails expose them to greater fraud.

The concern is understandable. Federal Reserve data shows that payment security issues are the second-largest payment pain point for businesses. Sixteen percent of firms experienced payment fraud in the past year. Citizens Bank research shows that nearly all mid-size firms report heightened anxiety around fraud exposure. At the same time, smaller businesses often face disproportionately greater financial impact. AI-driven fraud attempts are becoming more frequent and costly, reinforcing sensitivity around payment decisions.

Yet the data also reveals a disconnect between perception and reality. Legacy payment methods—particularly checks—remain a leading source of fraud risk. Checks are 16 times more likely to be lost, stolen or altered than electronic transfers, according to United States government findings cited by Citizens Bank. More than half of the businesses that experienced fraud last year still use checks. Despite this, many organizations continue to view checks as safer than instant payment methods because of their physical nature, even as evidence suggests greater fraud exposure.

By contrast, real-time payment rails are demonstrating stronger security performance. Many institutions using instant payments report limited or no operational fraud impact, supported by continuous monitoring, transaction-level visibility and faster detection. As experience grows, perceptions are shifting. Thirty-seven percent of businesses now cite enhanced security as a top benefit of adopting instant payments. This share is up from 25% one year earlier.

Still, confidence depends on readiness. FIs increasingly view fraud-prevention tools as essential to scaling instant payments. This view underscores the need to invest in monitoring, governance and exception handling as volumes grow.

The challenge ahead is not proving that instant payments can be secure—the data already does that. It’s overcoming entrenched assumptions that keep organizations tied to riskier legacy methods.

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The “Money Mobility Tracker®,” a PYMNTS Intelligence and Ingo Payments collaboration, examines how businesses and financial institutions are reassessing fraud risk involved with instant payments, why legacy methods remain the leading source of exposure, and how stronger security tools are enabling faster payments adoption with confidence.

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