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FedNow's $10M Limit: Why Fraud Prevention Is Structurally Broken
Audio is available on Spreaker — see link below.
The Fed's decision to raise FedNow's transaction limit to $10 million is exposing a critical gap between real-time payment rails and batch-era fraud infrastructure. Banks are making irreversible, high-value fraud decisions in seconds — with systems built for a different era.
Audio is available on Spreaker — see link below.
The Federal Reserve just raised FedNow's transaction limit to ten million dollars, and it's breaking fraud prevention in ways the industry isn't ready for. Here's the key structural problem.
Traditional anti-money laundering infrastructure was designed for batch environments. Investigators had hours, sometimes days, to review suspicious activity after settlement.
The numbers tell an awkward story. Seventy percent of banks report rising fraud losses.
There's a second problem that's structurally invisible. Sixty percent of financial institutions track chargeback exposure.
Regulators are watching this and drawing different conclusions. The United Kingdom's mandatory reimbursement rules for authorized push payment fraud now allocate the financial consequences of fraud failures directly to institutions.
The unresolved question is whether AI and machine learning tooling can actually complete a defensible fraud investigation before irreversible settlement. Vendor claims are running well ahead of documented deployment results.
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