A key conflict that will undoubtedly shape progress within fintech successes throughout 2025 is the shifting innovations of instant payments and the problem of evolving fraud alongside it.
As much as the threat of fraud poses a risk to the security of instant payments, Reed Luhtanen, executive director, US Faster Payments Council explained in a FinextraTV interview that it should not get in the way of moving forward.
In fact, despite the way technology can enable hackers to manipulate new vulnerabilities, Luhtanen said: "It’s also important to be honest about what’s happening […] Fraud over instant payment rails in the United States has been vanishingly rare and in other markets that have enabled even a wider array of use cases than we have, fraud and instant payments is very little across the world. […] Yes, that is something we need to tackle and understand and have a good plan for but it also shouldn't be the thing that makes us not move forward."
If we do approach instant payments with a more optimistic outlook in relation to its potential vulnerabilities, the question then becomes how do you implement instant payments effectively? This is an easier task for some who may have already begun that journey but for people right at the beginning, it can be a fast-moving, behemoth concept.
Luhtanen gave his opinion on the best view forward: "I like to keep this simple so I tell financial institutions two things: first, you need to develop a strategy that starts with the customers that you currently have and serving them better and also with the customers you want to try and attract and […] 2. Identify partners needed to implement that strategy and then you go into project planning and implementation only once you’ve got those two steps done."
The structure Luhtanen sets out speaks to the urgency companies often feel when a new technology or trend is emerging: to implement it as quickly as possible. Some of this can come from a lack of understanding and that’s where some of those partners can come in to help. The US Faster Payments Council, itself, does also provide a free-of-charge supplier catalogue.
Despite the positivity of instant payments and the increasing adoption percentages across the world, there are still some that remain a little apprehensive of it.
When speaking about why he believes some are apprehensive, specifically in the US, Luhtanen said: "If you think about a trust or uncertainty coin, you’ve got to gain trust and increase certainty by reducing fraud but on the other side, everybody needs to understand what are the puts and takes, how are losses allocated, how are errors resolved when there is fraud”.
Luhtanen’s belief is twofold then: a fear of fraud is rational and should be used to develop preventative and reactive safety plans, but that progress cannot be stifled by a fear of the unknown.
As many continue to debate the severity of the fraud issue within instant payment rails, it remains true that companies need to prioritise the discussion, whatever their stance.