Australia’s real-time payments revolution is reshaping finance, but it also brings new risks and compliance challenges.

Imagine sending money to a friend, paying a bill, or receiving your salary in seconds, no matter the day or hour. That vision became reality in Australia with the launch of the New Payments Platform (NPP) in 2018. Since then, the NPP has transformed how Australians transact, powering faster, smarter, and more flexible payments.

But while the benefits are undeniable, the NPP has also introduced fresh risks. Fraudsters and money launderers now exploit the speed of real-time payments, forcing banks, fintechs, and regulators to rethink how they approach compliance. In this blog, we take a deep look at the NPP, exploring its origins, features, benefits, risks, and what the future holds.

What is the New Payments Platform (NPP)?

The NPP is Australia’s real-time payments infrastructure, designed to allow funds to be transferred between bank accounts in seconds. Unlike traditional bank transfers, which could take hours or days, the NPP settles payments instantly, around the clock, 365 days a year.

A Collaborative Effort

The NPP was launched in February 2018 as a collaborative initiative between the Reserve Bank of Australia (RBA), major banks, and key financial institutions. It was developed to modernise Australia’s payments infrastructure and to match the expectations of a digital-first economy.

Core Components of the NPP

1. Fast Settlement Service (FSS): Operated by the RBA, this ensures transactions settle instantly across participating banks.
2. Overlay Services: Products built on top of the NPP to offer tailored use cases, such as Osko by BPAY for fast peer-to-peer payments.
3. PayID: A feature that allows customers to link easy identifiers such as email addresses or phone numbers to bank accounts for faster payments.
4. ISO 20022 Data Standard: Enables rich data to travel with payments, improving transparency and reporting.

The NPP is not just a new payment rail. It is an entirely new ecosystem designed to support innovation, competition, and efficiency.

Key Features of the NPP

• Speed: Transactions settle in less than 60 seconds.
• Availability: Operates 24/7/365, unlike traditional settlement systems.
• Rich Data: ISO 20022 messaging allows businesses to include detailed payment references.
• Flexibility: Overlay services enable innovative new use cases, from consumer-to-business payments to government disbursements.
• Ease of Use: PayID removes the need for remembering BSB and account numbers.

Benefits of the NPP for Australia

1. Consumer Convenience

Everyday Australians can send and receive money instantly. Whether splitting a dinner bill or paying rent, transactions are seamless and fast.

2. Business Efficiency

Businesses benefit from faster supplier payments, real-time payroll, and improved cash flow management. For SMEs, this reduces dependency on costly credit.

3. Government Services

Government agencies can issue refunds, grants, and welfare payments in real time, improving citizen experience and efficiency.

4. Financial Inclusion and Innovation

The NPP creates opportunities for fintechs to build new payment products and services, driving competition and giving consumers more choice.

5. Enhanced Transparency

The rich data standards improve reconciliation and reduce errors, saving time and cost for businesses.

The Risks and Challenges of Real-Time Payments

As with any innovation, the NPP comes with challenges. The very features that make it attractive to consumers also make it attractive to fraudsters and money launderers.

1. Authorised Push Payment (APP) Scams

Fraudsters use social engineering to trick customers into sending money themselves. Because NPP payments are instant, victims often cannot recover funds once transferred.

2. Money Mule Networks

Criminals exploit mule accounts to move illicit funds quickly. Dormant accounts or those opened with synthetic identities are often used as conduits.

3. Increased Operational Pressure

Compliance teams that once had hours to review suspicious transactions now have seconds. This shift requires entirely new approaches to monitoring.

4. False Positives and Noise

Traditional systems generate vast numbers of false positives, which overwhelm investigators. With NPP volumes growing, this problem is magnified.

5. Cyber and Identity Risks

Fraudsters use phishing, malware, and stolen credentials to take over accounts and push funds instantly.

Regulatory and Industry Response

Australian regulators have moved swiftly to address these risks.

• AUSTRAC: Expects banks and payment providers to implement effective real-time monitoring and suspicious matter reporting tailored to NPP risks.
• ASIC: Focuses on consumer protection and ensuring victims of scams are treated fairly.
• Industry Initiatives: The Australian Banking Association has been working on scam-reporting frameworks and shared fraud detection systems across banks.
• Government Action: Proposals to make banks reimburse scam victims are under consideration, following models in the UK.

The message is clear: institutions must invest in smarter compliance and fraud prevention tools.

Fraud and AML in the NPP Era

Why Legacy Systems Fall Short

Legacy monitoring systems were built for batch processing. They cannot keep up with the millisecond-level requirements of real-time payments. By the time a suspicious transaction is flagged, the funds are gone.

What Next-Gen Solutions Look Like

Modern systems use AI and machine learning to:

• Detect anomalies in real time.
• Link suspicious activity across accounts, devices, and geographies.
• Reduce false positives by learning from investigator feedback.
• Provide regulator-ready explanations for every alert.

Key Fraud Red Flags in NPP Transactions

• Large transfers to newly created accounts.
• Multiple small payments designed to avoid thresholds.
• Sudden changes in device or login behaviour.
• Beneficiaries in high-risk jurisdictions.
• Rapid pass-through activity with no balance retention.

Spotlight on Technology: Tookitaki’s Role

As the risks around NPP accelerate, technology providers are stepping up. Tookitaki’s FinCense is purpose-built for the demands of real-time payments.

How FinCense Helps

• Real-Time Monitoring: Detects suspicious activity in milliseconds.
• Agentic AI: Continuously adapts to new scam typologies, reducing false positives.
• Federated Intelligence: Accesses insights from the AFC Ecosystem, a global compliance community, while preserving privacy.
• FinMate AI Copilot: Assists investigators with summaries, recommendations, and regulator-ready narratives.
• AUSTRAC-Ready Compliance: Built-in reporting for SMRs, TTRs, and detailed audit trails.

Local Adoption

FinCense is already being used by community-owned banks like Regional Australia Bank and Beyond Bank. These partnerships demonstrate that even mid-sized institutions can meet AUSTRAC’s expectations while delivering excellent customer experiences.

The Future of NPP in Australia

The NPP is still evolving. Several developments will shape its future:

1. PayTo Expansion

PayTo, a digital alternative to direct debit, is gaining traction. It allows consumers to authorise payments directly from their accounts, offering flexibility but also new fraud vectors.

2. Cross-Border Potential

Future integration with Asia-Pacific payment systems could expand NPP beyond Australia, increasing both opportunities and risks.

3. Smarter Fraud Typologies

Criminals are already exploring ways to exploit deepfake technology, synthetic identities, and AI-driven scams. Fraud prevention must evolve just as quickly.

4. Industry Collaboration

Expect stronger cooperation between banks, fintechs, regulators, and technology vendors. Shared fraud databases and federated intelligence models will be crucial.

Conclusion

The New Payments Platform has reshaped Australia’s payments landscape. It delivers speed, convenience, and innovation that benefit consumers, businesses, and government agencies. But with opportunity comes risk.

Fraudsters have been quick to exploit the instant nature of NPP, forcing institutions to rethink how they detect and prevent financial crime. The solution lies in real-time, AI-powered monitoring platforms that adapt to new typologies and reduce compliance costs.

For Australian institutions, the NPP is more than a payment rail. It is the foundation of a new financial ecosystem. The winners will be those who embrace innovation, partner with the right AML vendors, and build trust through smarter compliance.

Pro tip: If your institution still relies on batch monitoring, you are already behind. Now is the time to modernise and future-proof your compliance with intelligent fraud and AML platforms.

It began with a phone call. A senior citizen in Navi Mumbai answered a number that appeared to belong to the police. Within hours, she was trapped on a video call with men in uniforms, accused of laundering money for terrorists. Terrified, she wired ₹21 lakh into what she believed was a government-controlled account.

She was not alone. In August 2025, cases of “digital arrest” scams surged across India. An elderly couple in Madhya Pradesh drained nearly ₹50 lakh of their life savings after spending 13 days under constant video surveillance by fraudsters posing as investigators. In Rajkot, criminals used the pretext of a real anti-terror operation to extort money from a student.

These scams are not crude phishing attempts. They are meticulously staged psychological operations, exploiting people’s deepest fears of authority and social disgrace. Victims are not tricked into handing over passwords. They are coerced, minute by minute, into making transfers themselves. The results are devastating, both for individuals and the wider financial system.

Background of the Scam

The anatomy of a digital arrest scam follows a chillingly consistent script.

1. The Call of Fear
Fraudsters begin with a phone call, often masked to resemble an official number. The caller claims the victim’s details have surfaced in a serious crime: drug trafficking, terror financing, or money laundering. The consequences are presented as immediate arrest, frozen accounts, or ruined reputations.

2. Escalation to Video
To heighten credibility, the fraudster insists on switching to a video call. Victims are connected to people wearing uniforms, holding forged identity cards, or even sitting before backdrops resembling police stations and courtrooms.

3. Isolation and Control
Once on video, the victim is told they cannot disconnect. In some cases, they are monitored round the clock, ordered not to use their phone for any purpose other than the call. Contact with family or friends is prohibited, under the guise of “confidential investigations.”

4. The Transfer of Funds
The victim is then directed to transfer money into so-called “secure accounts” to prove their innocence or pay bail. These accounts are controlled by criminals and serve as the first layer in complex laundering networks. Victims, believing they are cooperating with the law, empty fixed deposits, break retirement savings, and transfer sums that can take a lifetime to earn.

The method blends social engineering with coercive control. It is not the theft of data, but the hijacking of human behaviour.

What the Case Revealed

The 2025 wave of digital arrest scams in India exposed three critical truths about modern fraud.

1. Video Calls Are No Longer a Guarantee of Authenticity
For years, people considered video more secure than phone calls or emails. If you could see someone’s face, the assumption was that they were genuine. These scams demolished that trust. Fraudsters showed that live video, like written messages, can be staged, manipulated, and weaponised.

2. Authority Bias is a Fraudster’s Greatest Weapon
Humans are hardwired to respect authority, especially law enforcement. By impersonating police or investigators, criminals bypass the victim’s critical reasoning. Fear of prison or social disgrace outweighs logical checks.

3. Coercion Multiplies the Damage
Unlike phishing or one-time deceptions, digital arrests involve prolonged psychological manipulation. Victims are kept online for days, bombarded with threats and false evidence. Under this pressure, even cautious individuals break down. The results are not minor losses, but catastrophic financial wipe-outs.

4. Organised Networks Are Behind the Scenes
The professionalism and scale suggest syndicates, not lone operators. From forged documents to layered mule accounts, the fraud points to criminal hubs capable of running scripted operations across borders.

Impact on Financial Institutions and Corporates

Though victims are individuals, the implications extend far into the financial and corporate world.

1. Reputational Risk
When victims lose life savings through accounts within the banking system, they often blame their bank as much as the fraudster. Even if technically blameless, institutions suffer a hit to public trust.

2. Pressure on Fraud Systems
Digital arrest scams exploit authorised transactions. Victims themselves make the transfers. Traditional detection tools that focus on unauthorised access or password breaches cannot easily flag these cases.

3. Global Movement of Funds
Money from scams rarely stays local. Transfers are routed across borders within hours, layered through mule accounts, e-wallets, and fintech platforms. This complicates recovery and exposes gaps in international coordination.

4. Corporate Vulnerability
The threat is not limited to retirees or individuals. In Singapore earlier this year, a finance director was tricked into wiring half a million dollars during a deepfake board call. Digital arrest tactics could just as easily target corporate employees handling high-value transactions.

5. Regulatory Expectations
As scams multiply, regulators are pressing institutions to demonstrate stronger customer protections, more resilient monitoring, and greater collaboration. Failure to act risks not only reputational damage but also regulatory penalties.

Lessons Learned from the Scam

For Individuals

• Treat unsolicited calls from law enforcement with suspicion. Real investigations do not begin on the phone.
• Verify independently by calling the published numbers of agencies.
• Watch for signs of manipulation, such as demands for secrecy or threats of immediate arrest.
• Educate vulnerable groups, particularly senior citizens, about how these scams operate.

For Corporates

• Train employees, especially those in finance roles, to recognise coercion tactics.
• Require secondary verification for urgent, high-value transfers, especially when directed to new accounts.
• Encourage a speak-up culture where staff can challenge suspicious instructions without fear of reprimand.

For Financial Institutions

• Monitor for mule account activity. Unexplained inflows followed by rapid withdrawals are a red flag.
• Run customer awareness campaigns, explaining how digital arrest scams work.
• Share intelligence with peers and regulators to prevent repeat incidents across institutions.

The Role of Technology in Prevention

Digital arrest scams prove that traditional safeguards are insufficient. Fraudsters are not stealing credentials but manipulating behaviour. Prevention requires smarter, adaptive systems.

1. Behavioural Monitoring
Transactions made under duress often differ from normal patterns. Advanced analytics can detect anomalies, such as sudden large transfers from accounts with low historical activity.

2. Typology-Driven Detection
Platforms like Tookitaki’s FinCense leverage the AFC Ecosystem to encode real-world scam scenarios into detection logic. As digital arrest typologies are identified, they can be integrated quickly to improve monitoring.

3. AI-Powered Simulations
Institutions can run simulations of coercion-based scams to test whether their processes would withstand them. These exercises reveal gaps in escalation and verification controls.

4. Federated Learning for Collective Defence
With federated learning, insights from one bank can be shared across many without exposing sensitive data. If one institution sees a pattern in digital arrest cases, others can benefit almost instantly.

5. Smarter Alert Management
Agentic AI can review and narrate the context of alerts, allowing investigators to understand whether unusual activity stems from duress. This speeds up response times and prevents irreversible losses.

Conclusion

The digital arrest scam is not just a fraud. It is a form of psychological captivity, where victims are imprisoned through fear on their own devices. In 2025, India saw a surge of such cases, stripping people of their savings and shaking trust in digital communications.

The message is clear: scams no longer rely on technical breaches. They rely on exploiting human trust. For individuals, the defence is awareness and verification. For corporates, it is embedding strong protocols and encouraging a culture of questioning. For financial institutions, the challenge is profound. They must detect authorised transfers made under coercion, collaborate across borders, and deploy AI-powered defences that learn as fast as the criminals do.

If 2024 was the year of deepfake deception, 2025 is becoming the year of coercion-based fraud. The industry’s response will determine whether scams like digital arrests remain isolated tragedies or become a systemic crisis. Protecting trust is no longer optional. It is the frontline of financial crime prevention.

Programmable money isn’t a futuristic buzzword anymore — it’s here, and it’s scaling at breakneck speed. In 2024, stablecoin transactions exceeded $27 trillion, surpassing Visa and Mastercard combined. From international remittances to e-commerce, stablecoins are reshaping how money moves across borders.

But there’s a catch: the same features that make stablecoins so powerful — speed, cost efficiency, accessibility — also make them attractive for financial crime. Instant, irreversible, and identity-light transactions have created a compliance challenge unlike any before. For regulators, banks, and fintechs, the question is clear: can compliance scale as fast as stablecoins?

The Rise of Stablecoins: More Than Just Crypto

Stablecoins are digital tokens pegged to a stable asset like the U.S. dollar or euro. Unlike Bitcoin or Ether, they aren’t designed for volatility — they’re designed for utility. That’s why they’ve become the backbone of digital payments and decentralised finance (DeFi).

• Cross-border remittances: Workers abroad can send money home cheaply and instantly.
• Trading and settlements: Exchanges use stablecoins as liquidity anchors.
• Merchant adoption: From small retailers to payment giants like PayPal (with its PYUSD stablecoin launched in 2023), stablecoin rails are entering mainstream commerce.

With global players like USDT (Tether) and USDC (Circle) dominating, and even central banks exploring CBDCs (Central Bank Digital Currencies), it’s clear stablecoins are no longer niche. They are programmable, scalable, and systemically important.

But scale brings scrutiny.

The Compliance Gap: Why Old Tools Don’t Work

Most financial institutions still rely on compliance infrastructure designed decades ago for slower, linear payment systems. Batch settlements, SWIFT messages, and pre-clearing windows gave compliance teams time to check, flag, or stop suspicious activity.

Stablecoins operate on entirely different principles:

• Real-time settlement: Transactions confirm in seconds.
• Pseudonymous wallets: No guaranteed link between a wallet and its true owner.
• DeFi composability: Funds can move through multiple protocols, contracts, and blockchains with no central chokepoint.
• Irreversibility: Once sent, funds can’t be clawed back.

This creates an environment where bad actors can launder funds at the speed of code. Legacy compliance systems — built for yesterday’s risks — simply cannot keep up.

The New Typologies Emerging on Stablecoin Rails

Financial crime doesn’t stand still. It adapts to new rails faster than regulation or compliance can. Here are some typologies unique to stablecoins:

1. Money Mule Networks
   Organised groups recruit international students or gig workers to act as “cash-out points,” moving illicit funds through stablecoin wallets before converting back to fiat.
2. Cross-Chain Laundering
   Criminals exploit bridges between blockchains (e.g., Ethereum to Tron or Solana) to break traceability, making it harder to follow the money. This tactic was highlighted in multiple reports after North Korea’s Lazarus Group laundered hundreds of millions in stolen crypto across chains.
3. DeFi Layering
   Funds are routed through decentralised exchanges, lending platforms, or automated market makers to mix flows and obscure origins. The U.S. Treasury’s sanctions on Tornado Cash in 2022 marked a watershed moment, underscoring how DeFi mixers can become systemic laundering tools.
4. Sanctions Evasion
   With traditional banking rails restricted, sanctioned entities increasingly turn to stablecoins. The U.S. Office of Foreign Assets Control (OFAC) has flagged stablecoin usage in multiple enforcement actions tied to Russia and other high-risk jurisdictions.

Each of these typologies highlights the speed, complexity, and opacity of stablecoin-based laundering. They don’t look like traditional fiat red flags — they demand new methods of detection.

What Compliance Needs to Look Like for Stablecoins

To match the speed of programmable money, compliance must itself become programmable, adaptive, and dynamic. Static, rule-based systems are insufficient. Instead, compliance must shift to a risk infrastructure that is:

1. Risk-in-Motion Monitoring

Rather than flagging transactions after they settle, monitoring must happen in real time, detecting structuring, layering, and unusual flow patterns as they unfold.

2. Smart Sanctions & Wallet Screening

Name checks aren’t enough. Risk detection must consider wallet metadata, behavioural history, device intelligence, and network analysis to surface high-risk entities hidden behind pseudonyms.

3. Wallet Risk Scoring

A static “high-risk wallet list” doesn’t work in a world where wallets are created and discarded easily. Risk scoring must be dynamic and contextual, combining geolocation, device, transaction history, and counterparties into evolving risk profiles.

This is compliance at the speed of programmable money.

Tookitaki’s FinCense: Building the Trust Layer for Stablecoins

At Tookitaki, we’re not retrofitting legacy tools to fit this new world. We’re building the infrastructure-grade compliance layer programmable money deserves.

Here’s how FinCense powers trust on stablecoin rails:

• Risk-in-Motion Monitoring
  Detects structuring, layering, and anomalous flows across chains in real time.
• Smart Sanctions & Wallet Screening
  Goes beyond simple lists, screening metadata, networks, and behavioural red flags.
• Wallet Risk Scoring
  Integrates device, location, and transaction intelligence to give every wallet a living, breathing risk profile.
• Federated Intelligence from the AFC Ecosystem
  Scenarios contributed by 200+ compliance experts worldwide enrich the system with the latest typologies.
• Agentic AI for Investigations
  Accelerates investigations with an AI copilot, surfacing insights and reducing false positives.

FinCense is modular, composable, and built for the future of programmable finance. Whether you’re a digital asset exchange, fintech, or bank integrating stablecoin rails, it enables you to operate with trust and resilience.

Conclusion: Scaling Trust with Stablecoins

Stablecoins are here to stay. They’re reshaping payments, cross-border transfers, and financial inclusion. But they’re also rewriting the rules of financial crime.

The next phase of growth won’t be defined by speed or accessibility alone — it will be defined by trust. And trust comes from compliance that can move as fast and adapt as dynamically as programmable money itself.

Stablecoins will define the next decade of finance. Whether they become rails for inclusion or loopholes for crime depends on how we build trust today. Tookitaki’s FinCense is here to make that trust possible.