Instant Payments Fraud vs Check Fraud: What Financial Institutions Need to Know

Fear of instant payments fraud is one of the most cited reasons financial institutions delay adoption of FedNow and RTP. But the data tells a different story entirely.

According to the 2025 AFP Payments Fraud and Control Survey, 63% of organizations faced check fraud in 2024. Just 2% reported any fraud on RTP or FedNow. Research from PYMNTS Intelligence and The Clearing House puts it plainly: fraud is 31 times more likely on checks than on real-time payment rails.

The institutions most worried about instant payments fraud are still cutting checks.

Why Instant Payments Fraud Rates Are So Low

The reason instant payments fraud rates are low is structural, not coincidental.

Check fraud is a physical crime. It starts with mail theft: criminals intercept envelopes, steal the check, and then wash, counterfeit, or double-deposit it. Every check a business writes hands the recipient its account number, routing number, and signature in plain sight. That information can be used to manufacture counterfeits, drain accounts, or fund organized fraud rings. Global check fraud losses hit $26.6 billion in 2023, with 80% of those losses in the Americas.

Instant payments remove that entire attack surface. There is no physical instrument to intercept, no ink to wash, no account number printed on the payment itself. Instant payments are push-only and authenticated. Credentials never travel with the transaction. And because instant payments settle in real time with immediate finality, there is no multi-day clearing window to exploit with double presentment.

The federal government reached the same conclusion. A March 2025 Executive Order phased out paper Treasury checks by September 2025, citing fraud as the primary driver. Government checks are 16 times more likely to be lost, stolen, or altered than electronic payments.

What Financial Institutions Need to Know About Instant Payments Fraud Risk

Instant payments do introduce one fraud vector worth understanding: Authorized Push Payment fraud, where a customer is deceived into sending money to a criminal through social engineering rather than physical theft. This is a real risk, and it requires real controls: account verification before funds move, behavioral analytics, velocity limits, and real-time monitoring.

But those controls exist today. And the data shows they are working. In April 2025, out of 35 million RTP transactions, 123 fraud cases were reported.

The SAFE™ framework, developed specifically for financial institutions entering instant payments, addresses this directly by building fraud governance upstream into the payment decision rather than treating it as a downstream audit function.

The Bigger Picture on Instant Payments Fraud

The fraud risk financial institutions are comfortable with is not smaller than the fraud risk in instant payments. It is just familiar.

Every week without a real-time data layer is a week without the foundation that fraud management, AI, liquidity, and orchestration all depend on. And a week customers remain more exposed to the instrument already being processed, not the one being avoided.

For a deeper look at how check fraud works, how instant payments structurally eliminate most of those attack vectors, and what the wait is actually costing financial institutions and their customers, read the full analysis in this week's Instant Edge.

Read the full article: Risk Doesn't Rise. It Surfaces. →

Marcia Klingensmith is a payments strategist and founder of FinTech Consulting LLC. She publishes The Instant Edge, a weekly newsletter for senior leaders at community and regional financial institutions navigating instant payments adoption.