Speed Meets Security: How Real-Time Payments Are Outsmarting Fraud

Despite rapid advancements in digital payments, healthcare transactions remain frustratingly slow and outdated. Patients accustomed to seamless digital transactions elsewhere are still dealing with lengthy reimbursement wait times and cumbersome billing processes. The culprit? Many healthcare providers still rely on legacy payment methods — paper checks, manual claims processing and outdated systems that create inefficiencies at every step. This reliance on traditional payment rails isn’t just inconvenient — it’s costly. Research shows that 48% of healthcare providers still process claims manually, a factor contributing to rising payment errors and delays. Claims inaccuracies increased from 43% in 2022 to 55% in 2024, fueling a surge in denied claims and refund requests. Meanwhile, the rising complexity of healthcare billing is putting even more pressure on outdated systems. At the same time, patient expectations are evolving. While just 39% of patients preferred instant healthcare disbursements in 2023, that number surged to 77% in 2024. Consumers now expect the same efficiency in healthcare payments that they experience when shopping online or transferring money digitally. Providers that fail to modernize risk declining patient satisfaction, delayed revenue cycles and operational inefficiencies. The good news? Change is happening. Sixty-six percent of small to mid-sized businesses (SMBs) in the healthcare provider sector used real-time payments in the past year, and third-party platforms are accelerating the transition to digital disbursements. These innovations aren’t just streamlining workflows — they’re improving cash flow, reducing administrative burdens and enhancing patient trust. In a time of rising healthcare costs and increasingly complex billing models, modernizing payment processes isn’t just an efficiency upgrade — it’s a strategic necessity.

The payments industry is increasingly defined by speed, security and precision, and generative artificial intelligence promises to transform every facet of financial services. Yet, as Lisa McFarland, executive vice president and chief product officer at Ingo Payments, told PYMNTS for the series “What’s Next In Payments: Memo to the GenAI Companies,” if she were to sit down with Sam Altman or other AI leaders, her message would be clear: The payments industry needs more specialized solutions. “There is a lot that we’ve had to develop internally,” McFarland said, emphasizing the gap between off-the-shelf AI tools and the bespoke needs of players in the financial services space. “You can take core tools, but you’ve got to do a lot of work from a development perspective and a learning and intelligence perspective internally.” Against that backdrop, collaboration between generative AI companies and the payments industry may turn out to be essential to realize future opportunities. McFarland said Ingo itself engages with both AI developers and third-party service providers to enhance capabilities and address specific needs. “We do reach out to a host of companies in areas where we are very focused on development and enhancement,” she said. However, proactive engagement from AI companies is also important, particularly in designing solutions that align with the unique demands of financial services. The Front Lines of AI Applications Within Payments McFarland said customer service is a “low-hanging fruit” for AI, where tools like interactive voice response (IVR) chatbots and customer service representative (CSR) prompts are improving interactions and reducing costs. “We’ve increasingly begun using AI-based tools in the technology area,” she said, adding that these tools, particularly in code analysis and completion, improve productivity for junior developers, enabling faster and more accurate delivery of solutions. However, efficiency gains go beyond internal operations. Dynamic interactions powered by real-time analytics are reshaping customer experiences. “We’re dynamically changing an experience with a customer based on behavioral or other data analytics,” McFarland said, emphasizing that these capabilities promise a future where AI-powered interactions are not just equivalent to human service but potentially superior, offering greater context, quicker resolutions and enhanced personalization. In the high-security world of payments, risk and fraud management remain top priorities, as well as top opportunity areas for generative AI applications. McFarland described Ingo’s use of AI to assess and monitor transactions, identify anomalies, and differentiate between legitimate and fraudulent interactions, saying of AI’s role in transaction location analysis, risk scoring and underwriting that Ingo is “increasingly identifying really unique ways to be able to identify good interactions.” One of the most promising areas is AI’s ability to analyze behavioral patterns. “There are ways that humans interact with applications… that are different than fraud actors,” McFarland said. By identifying these nuances, AI systems can escalate responses dynamically, a capability that is “of intense interest” and critical to the payments ecosystem, she said. The Next Chapter of AI in Payments While the benefits of AI are evident, McFarland said one challenge is security and data ownership. Tools designed to enhance efficiency, such as AI-based note-taking applications, often fall short of financial services’ stringent data protection requirements. This issue is a barrier to broader AI adoption, highlighting the need for AI companies to develop solutions tailored to the specific regulatory and security requirements of the financial industry. “In the payments and financial services space in general, you’ve got to be really careful about the tools you use, and the licenses and data protection associated with those licenses,” McFarland said, adding that AI solutions must prioritize robust data security frameworks, ensuring that financial institutions maintain ownership and control over sensitive information. Instead of generic solutions, AI companies should collaborate with industry players to design models that address unique challenges like transaction anomalies, dynamic risk scoring and regulatory compliance, she said. McFarland said she envisions a future where AI powers deeper personalization across customer engagement and service. She highlighted the potential of AI to create more intelligent, responsive interactions that not only address customer needs but anticipate them. “The better those tools get… you could get to a place where they’re better than a direct human interaction,” she said. This evolution is not limited to customer-facing applications. By adjusting interactions and responses in real time, AI can also streamline internal decision-making processes, ensuring that businesses respond swiftly and effectively to emerging challenges. For AI companies, the message is clear: The payments sector is ready for collaboration, but it needs tools that prioritize security, specialization and scalability. “The better those tools get… the better the outcomes for everyone involved,” McFarland said.

What keeps paper checks alive in the digital age? Despite their declining popularity for personal transactions, checks still account for nearly 40% of U.S. B2B payment volume. In fact, 68% of companies relied on checks for B2B payments in 2023, and 70% of businesses stated they have no plans to discontinue their use in the next two years. However, this persistence comes with a hefty price. Check fraud is rising, costing businesses an estimated $24 billion in 2023 — nearly double the amount recorded five years ago. Fraudsters target checks because they are easy to intercept, alter or counterfeit. According to a 2024 survey, 15,417 Bank Secrecy Act reports were tied to mail theft-related check fraud over a six-month period, amounting to $688 million in fraudulent transactions. Small to mid-sized businesses (SMBs) are particularly vulnerable, with 24% reporting fraud incidents compared to 15% of the general population. Why haven’t businesses moved away from checks? Many perceive them as low-cost or “free,” but manual processing creates hidden expenses. Time, labor and delayed payment cycles add to these costs, and fraud losses only amplify the financial burden. By contrast, digital payment systems offer advanced security features, including artificial intelligence (AI)-driven fraud detection, encryption and real-time monitoring. These tools minimize risks while providing faster transaction speeds and enhanced financial visibility. Transitioning to digital payments — as well as instant rails such as the RTP® network and the FedNow® Service — is more than just a fraud prevention measure — it is a way to future-proof financial operations. Businesses using instant payments report improved cash flow, lower overhead and stronger vendor relationships.