Fraud Looms with Federal Reserve’s Instant Payment

Fraud Looms with Federal Reserve’s Instant Payment
Brett_Hondow / Pixabay

Merchants applaud the Federal Reserve Board’s plans to develop a instant payment and settlement system.

HOWEVER: possible fraud problems should give pause.

Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q3 2019 hedge fund letters, conferences and more

Fund Manager Profile: Kris Sidial Of Tail Risk Fund Ambrus Group

invest Southpoint CapitalA decade ago, no one talked about tail risk hedge funds, which were a minuscule niche of the market. However, today many large investors, including pension funds and other institutions, have mandates that require the inclusion of tail risk protection. In a recent interview with ValueWalk, Kris Sidial of tail risk fund Ambrus Group, a Read More



  • 8% of all consumers had a card misused for CNP transactions (2017)—an 11% increase in incidence from the year before.
  • There is currently no clear-cut chargeback process for handling instant payment fraud.

Global fintech exec Monica Eaton-Cardone says that if consumers are unable to dispute and rectify fraudulent account activity, public trust in an instant payment system will plummet.

“First we need to establish consistent and fair standards for chargeback process and management. Only then can we start talking seriously about instantaneous payments really working.” ~Eaton-Cardone

Monica Eaton-Cardone has extensive experience developing agile technologies and products, optimizing ecommerce profitability, analyzing risk relativity, and creating payment processing solutions. She developed Chargeback911's robust chargeback-mitigation solution, which combines human insights with agile technology, that is now used by thousands of companies worldwide.

Monica Eaton-Cardone notes that we must ask the following questions about the instant payment proposed by the Fed:

  • What exactly is the Federal Reserve Board proposing?
  • How soon is FedNow expected to take effect?
  • Why are merchants so enthusiastic about the idea?
  • What is the expected friction with consumers?
  • What are the consequences of higher fraud and why?
  • How would instant payment complicate the handling of chargebacks?
  • Is there a consistent way of handling chargebacks?
  • What do we need to do to prevent a massive loss of public confidence in the system?
Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
Previous article 2019 Invest for Kids Conference: GrizzlyRock, Zell, Vinik And More
Next article Stocks finished in bullish fashion in the wake of a third rate cut

No posts to display