ACI & Kinexys add payee checks to bank payment flows

ACI Worldwide and Kinexys by J.P. Morgan have integrated Kinexys Liink's Confirm application into ACI's Fraud and Financial Crime product, adding account and payee verification to payment workflows used by banks.

The integration is designed to let financial institutions check whether an account exists, is open, and matches the intended recipient before a payment is sent. The verification sits within the payment process rather than as a separate step after a transaction has been initiated.

The agreement reflects rising concern across banking about fraud on instant payment systems, where transactions are typically irreversible once funds have been transferred. That has increased pressure on banks to identify scams and misdirected payments before money leaves a customer account.

According to ACI's Scamscope report, authorised push payment scams generate USD $4.4 billion in losses worldwide, a figure projected to rise to USD $7.6 billion by 2028. The report found that 63 per cent of those losses now occur on real-time payment rails, with that share expected to approach 80 per cent over the next three years.

Unlike traditional payment types, instant payment systems give banks little chance to recover funds once a fraudulent or mistaken transfer has been completed. As a result, account validation and payee verification have become more prominent in fraud prevention strategies, particularly for banks handling growing volumes of account-to-account transactions.

Fraud controls

The integration supports a broad range of payment types and geographies. Kinexys Liink, the data-sharing network behind the Confirm application, is used to validate account ownership and other data elements in more than 70 countries, according to the companies.

The network is payment rail-agnostic, allowing banks to use a single connection to send and receive payee verification requests across different payment systems. ACI is embedding that capability into its fraud platform so institutions can apply checks across ACH, wire, and instant payments within a single workflow.

The approach is intended to give banks a more consistent set of controls across payment rails while addressing compliance requirements that are changing in several markets. It also aims to reduce reliance on fragmented systems tied to specific channels or transaction types.

Gloria Wan, General Manager of Kinexys Liink at Kinexys by J.P. Morgan, outlined the rationale for the deal.

"By integrating Kinexys Liink's Confirm application directly into ACI's fraud management platform, we're making it easier for institutions to meet evolving account validation requirements and help protect their customers from fraud. Together, we're supporting institutions as they adapt to a rapidly changing landscape and build greater trust in every transaction," Wan said.

Real-time risk

The integration comes as banks face greater scrutiny over how they protect customers in faster payments. In several markets, regulators and payment system operators have pushed for stronger pre-payment checks to reduce scams, while reimbursement expectations have increased the cost of failures for financial institutions.

Consumer awareness of authorised push payment fraud has also risen, particularly in markets where instant transfers are common in retail banking. That has made verification at the start of a transaction a more urgent operational issue rather than a back-office control.

ACI's Fraud and Financial Crime product provides real-time intelligence across channels, and the latest integration is intended to bring verification and fraud decisioning closer together. The functionality also sits within ACI Connetic, the company's cloud-based payments platform, which connects account-to-account payments, card payments, and fraud tools.

Marc Trepanier, Director of Analytics and Optimization for Fraud and Financial Crime at ACI Worldwide, said the timing of fraud prevention has become critical as instant payments become more widely used.

"Instant payments change the economics and the timing of fraud," Trepanier said. "When payments settle in real time, verification must have happened prior to the transaction in real time as well. Embedding payee confirmation into the payment flow gives banks the ability to stop fraud before it happens, while supporting the scale and speed customers expect."