Canada’s Real-Time Rail (RTR) is a new piece of national payments infrastructure enabling Canadians and businesses to send and receive data-rich payments that clear and settle in seconds, 24/7/365. For the Canadian payments ecosystem, it’s a new rail on which to build the next generation of products and services.
Speed alone is not enough. For the RTR to succeed, it needs to give Canadians one more thing: confidence. People need confidence that systems are being designed with security and fraud risk mitigation in mind.
Speed is where confidence gets tested. Real-time payments are a gift to honest users — who wouldn’t like payments to be settled faster? But they bring a certain risk: Once money moves, it can be gone in a second or two. As other countries have learned (through levels of fraud that exploit real-time payments), in a real-time world, the getaway car is a lot faster. That makes identifying potential fraud before funds leave an account especially important.
Canadians and the business community need confidence that effective security measures are in place. That’s why we’ve built fraud services capable of real-time fraud intelligence. Launching the RTR with Interac-built fraud detection capabilities integrated into the system makes Canada the first G7 country to deploy real-time, centralized fraud services at launch.
Let’s look at how we’re doing that.
The view from the centre of the ecosystem
Through our fraud services, Interac supplies the intelligence that underpins robust anti-fraud measures. When it comes to the RTR, we provide the financial institutions (FIs) with rapid, data-backed intelligence about each transaction, allowing them to make informed, timely decisions that help protect their customers. The FIs then make the decision about whether to allow or decline the transaction. (Interac never stops a payment. That call sits with the FIs.)
In building this system, we’ve applied knowledge and data insights we’ve acquired over decades of operating account-to-account payments at scale with Interac e-Transfer. Canadians use Interac services 20 million times a day, and as such we have deep expertise in identifying and responding to evolving fraud patterns.
I like to say that when it comes to fraud prevention, it takes a village. Fraud is a network problem. Individual FIs may have visibility into only part of a transaction or fraud pattern. But even the largest banks are just a single node in the Canadian payments network.
Interac is different. We sit at the centre of the payments ecosystem enabling us to see the whole fraud flow.
How Interac is bringing anti-fraud intelligence to the RTR
Interac has created a central scoring process that enables our system to rate every transaction for risk in real time. When our fraud services are used on the RTR, fraud checks on each transaction can be conducted within seconds. Our system assigns every transaction a risk score, risk rating, reason codes and separate scores for account takeover risk and scam risk. This data gets sent to the FIs involved.
Based on this scoring data, the FI’s own security layers trigger fraud instruction and declining. Every payment gets checked in the time it takes to send it.
Central fraud scoring is one pillar in a four-pillar anti-fraud capability.
- Confirmation of payee checks that the payee information provided by the sender matches the payee information at the receiving FI. Before money leaves the sender’s account, the sender sees whether the payee’s name matches the account.
- Central fraud scoring, as I explained above, rates every transaction in real time, and provides fast risk assessments to financial institutions.
- A central risk list lets every financial institution on the system see accounts tied to confirmed fraud.
- And finally, central fraud reporting pulls fraud data into one place, so patterns surface faster than any single FI could see them.
Together, these four pillars make up an anti-fraud model that works fast enough for a real-time economy, as opposed to traditional models that have relied on batch processing and delayed decision-making. ACAMS, an international company that provides anti-financial crime training, aptly coined the term “intelligence in flight” to describe the kind of just-in-time fraud detection approach we’ve built.
Rebuilding Canada’s digital confidence
Canadians are being asked to engage with a host of new digital experiences, with more on the horizon.
At the same time, we find ourselves in a period of low digital confidence. The research behind our Digital Prosperity Index reveals that among 14 peer countries assessed, Canada ranks the lowest in digital confidence. By “confidence” we mean the security of Canada’s digital systems and public trust in them, measured through scam exposure, national cybersecurity readiness and trust in AI.
To allow scams and fear of fraud to reign over the digital landscape means Canadians would miss out on the benefits from digital innovation, leading to slower growth and less digital prosperity. That’s why a robust, centralized, real-time anti-fraud solution is critical for Canada.
For the RTR and for other initiatives that use digital technologies to make Canadians’ lives easier and more productive, the stakes are nothing less than Canada’s future prosperity.
As a delivery partner for Canada’s Real-Time Rail, Interac designed and built the RTR Exchange, serves as its Technical Operator and delivers the system’s centralized fraud services.
