2 PAYMENT METHOD PROFILES: PAY BY BANK
Fraud/Authentication Process As discussed in the special feature on Fraud and Approvals in Section 1, real-time payments are susceptible to fraud such as Authorized Push Payment (APP) fraud and pig butchering scams. Additionally, the speed of transactions means there may be less time for verification and fraud checks. Indeed, in 2022 the European Banking Authority (EBA) assessed that the risk of fraudulent transactions is up to ten times higher in instant credit transfers compared to regular credit transfers. 526 Despite this risk, there is evidence of real-time payment rails with low fraud rates. The U.K.’s Faster Payments is an example: there were 4.5 billion Faster Payments transactions in 2023, and only 417,459 were involved in APP scam cases. 527 Meanwhile, Brazil’s real-time network Pix is known to have a low rate of fraud, at just 0.007% of transactions. 528 Cross-Border/FX Capability Cross-border functionality is a fast-growing area of innovation. Examples include linkages between Southeast Asian platforms and India’s UPI, as well as linkages between India’s UPI and the UAE’s Aani. Moreover, SEPA Instant Credit provides cross border functionality with nations in the European Economic Area further underscoring the momentum toward seamless international payment experiences. Refunds Refund mechanisms are another critical area of development in real-time payments. Refunds have been irrecoverable for instant payments in the United States. 529 By contrast, other markets are introducing structured processes for handling refunds. Pix refunds for example allow customers to locate the transaction they wish to process a refund for and follow instructions to process full and partial refunds. 530 PayTo refund process allows individual service providers to offer refunds through their APIs. Customers can dispute for various reasons and expect funds to be returned to their account within 10 business days. 531, 532, 533 Full and partial refunds are allowed. 534 UPI’s refund process allows customers to raise complaints regarding specific UPI transactions. The complaints will be received by the payment service provider’s bank and NPCI organization, which operates UPI. 535
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