It may soon be possible to send and receive money overseas through bank transfers in a matter of seconds, but there are concerns the advance could play into the hands of fraudsters.
Australian bank Westpac said “instant cross-border payments” were a major talking at the Sibos 2019 banking conference in London in September that attracted 11,000 attendees.
Much of the buzz was focused on a global payments initiative by financial service company Swift that is designed to speed up international bank transfers by connecting “real time” payment systems around the world, Westpac said in a blog post.
Westpac has participated in trials and said a “speed record” of 41 seconds had been set by other banks for a cleared transfer between Singapore and Germany.
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A Westpac New Zealand spokeswoman said it was always looking for ways to improve the payments process for its customers and was monitoring developments in other countries, including Australia.
Near instant bank transfers could speed up e-commerce, but the spokeswoman noted they could make it harder for banks to reverse fraudulent payments.
“Therefore it’s really important that customers contact their bank immediately if they believe a payment is fraudulent,” she said.
Fraudsters often use “money mules” to transfer the proceeds of fraud to overseas bank accounts.
If banks can detect patterns of suspicious activity they can sometimes intercept transfers before money leaves the country.
Martin Cocker, chief executive of cyber-safety organisation Netsafe, said it told people it was safer to use banks than specialist money transfer services to remit money.
“They are a little bit slower, but they give you the opportunity to intercept fraud, and obviously as those system speed up and the timeframes become more like those offered by money transfer services, then some of that opportunity is lost.
“Like all technological advances, cyber criminals will make the most of it,” he said.