Insta-Payments, Instant Risks: A Blueprint for Securing Zelle, Cash App, and FedNow Transactions

By Patrick Keating, President & CEO, Keysec Advisors

Instant payment platforms like Zelle, Cash App, PayPal, and the new FedNow service are transforming how customers move money. But that transformation comes with a price: a shrinking fraud-detection window. We’ve gone from days or hours to mere minutes to catch a fraudulent transaction. That speed is great for customers — but it’s a double-edged sword for banks.

Speed Creates Vulnerability

I’ve watched instant payments reshape the fraud landscape. Criminals are combining social engineering with technical attacks such as SIM swaps and rogue device registrations, allowing them to impersonate legitimate customers and even intercept verification calls at small community banks.

AI is making this easier. Nation-state actors and organized crime groups are blending cyber tactics with fraud schemes, and small and mid-sized banks are prime targets because they don’t have the same protections as the big institutions.

Fraud and Cybersecurity Must Converge

One of the biggest mistakes I see is banks keeping fraud prevention and cybersecurity in separate silos. In one case, hackers infiltrated a bank’s wire system, queued up a fraudulent multi-million-dollar transfer, and then launched a ransomware attack. By the time the bank recovered — five to seven days later — the money was long gone. Fraud detection can’t operate in isolation from cyber defense.

Core Controls to Slow the Bad Guys

Here are some of the baseline controls I recommend to shift the loss curve:

• Stronger identity proofing with cooling-off periods for profile changes like email, phone, or device registration — similar to the 30-day holds banks already use for address changes.

• Transaction holds for high-value instant payments, delaying transfers above a risk-based threshold.

• Adaptive, risk-based authentication that triggers extra verification when unusual activity is detected.

• Behavioral analytics, such as keystroke cadence recognition, to spot impostors even if they have valid credentials.

These aren’t exotic measures. They’re practical steps that reduce exposure without creating friction for legitimate customers.

Post-Payment Recovery Playbooks

I strongly urge banks to develop integrated fraud-cyber incident response plans. Cyber experts know how to spot a brute-force login attack, while fraud teams understand instant payment fraud patterns. When they combine intelligence, both become far more effective.

Another step I recommend is creating “data flow diagrams” that trace exactly how money enters and leaves your organization. Don’t map out the servers — map the actual movement of data and funds. Until you see it visually, you don’t truly know where your vulnerabilities are.

The Takeaway for Bank Leaders

My message to boards, risk committees, and executives is straightforward: Speed-driven payment platforms demand speed-matched defenses. If you’re not already having this conversation, you’re behind. Good cyber hygiene, integrated teams, and smart controls are your best chance to protect both your customers and your institution.

And remember: these risks aren’t static. The more proactive you are, the better your odds of staying ahead. Keep this dialogue going within your own organization, with industry peers, and with trusted outside resources.