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PACE Act could create faster payments—and faster disputes, warns Chargebacks911

Thursday, May 21, 2026 — 16:29:17 (UTC)

PACE Act Could Create Faster Payments—and Faster Disputes, Warns Chargebacks911

WASHINGTON — In late April, U.S. Representatives Young Kim and Sam Liccardo introduced the Payments Access and Consumer Efficiency (PACE) Act, legislation that would allow qualifying nonbank payment providers to directly access federal payment rails. While the move is widely seen as a step toward faster, more efficient payments and greater fintech participation, experts at Chargebacks911, a global leader in chargeback prevention and dispute management, warn that removing reliance on sponsor banks also eliminates a key layer of risk oversight—placing greater responsibility on these providers to manage fraud exposure and adopt unified, end-to-end dispute prevention and response strategies.

The PACE Act proposes a structural change to how the U.S. payments ecosystem operates by creating a new class of institutions—“registered covered providers”—that would allow qualified nonbank payment companies to directly access Federal Reserve payment systems, including Fedwire, FedNow, and Automated Clearing House. Today, many fintechs and payment providers rely on intermediary banks to connect to these systems, adding cost, complexity, and delays. By enabling direct access, the legislation aims to accelerate payments, reduce fees, and increase competition.

However, Chargebacks911 notes that this access comes with significant new obligations. Unlike previous efforts to expand payment system participation, the PACE Act establishes a parallel regulatory framework that requires qualifying nonbanks to operate under bank-like standards, including capital and liquidity requirements, strict governance controls, and ongoing supervision by the Office of the Comptroller of the Currency (OCC).

“The PACE Act represents meaningful progress in modernizing how money moves,” said Monica Eaton, Founder and CEO of Chargebacks911. “But it also marks a turning point for fintechs and payment providers. Direct access to federal payment rails brings greater capabilities to many nonbanks, but it also assigns greater accountability for these entities, particularly when it comes to fraud prevention and dispute resolution.” For registered covered providers, payment flows become more direct and the number of intermediaries involved in each transaction is reduced. While this improves efficiency, it also removes traditional checkpoints where suspicious activity could be identified before funds are transferred, increasing reliance on post-transaction processes to resolve issues after the fact.

For nonbank entities, this shift brought by the PACE Act may reduce visibility into certain transaction flows while increasing pressure to manage downstream impacts like fraud claims and disputes. While merchants may benefit from faster payments, they will require quicker response times and stronger communication from registered covered providers to prevent disputes from escalating into chargebacks.

For fintechs transitioning to registered covered provider status, this introduces a fundamental tradeoff: lower dependency on sponsor banks in exchange for higher regulatory, operational, and compliance obligations.

"The PACE Act will move accountability squarely onto the non-banks gaining direct rail access, a significant shift for an industry that has not always had to answer directly for what goes wrong,” said Nathanael Coffing, Chief AI and Operations Officer at Invela, an open finance risk management company. “When a payment goes wrong at FedNow speed, resolving it requires knowing exactly who was on the rails before the transaction cleared, who was accredited, what their risk profile looked like and who bears liability. Faster payments demand faster dispute resolution, and faster dispute resolution demands a clearer picture of every participant in the network before a transaction ever clears.”

Chargebacks911 emphasizes that this evolution comes at a time when dispute activity and fraud-related losses are already rising across the payments ecosystem. As transactions become faster and more seamless, disputes are expected to follow suit, becoming more immediate, more frequent, and more complex to manage for unprepared nonbanks.

While the PACE Act includes provisions to safeguard consumer funds and ensure recovery in insolvency scenarios, Chargebacks911 notes that additional clarity will be needed around dispute rights, liability frameworks, and cross-ecosystem data sharing to ensure consistent consumer protection.

“Faster payments will inevitably lead to faster disputes,” Eaton added. “If the industry does not modernize the infrastructure that governs what happens after the transaction, we risk creating a system that is efficient at moving money, but far less effective at resolving issues when something goes wrong.”

With the PACE Act still progressing through the legislative process, Chargebacks911 recommends that qualifying fintechs and nonbanks prepare now by optimizing dispute prevention and response processes to match the speed of real-time payments. This includes investing in real-time transaction monitoring, implementing proactive customer communication and clear billing descriptors, leveraging pre-dispute alert networks, and adopting unified, end-to-end dispute management platforms that provide visibility across the full transaction lifecycle.

“The future of payments is not just about speed—it’s about trust,” Eaton said. “And trust depends on having clear, scalable systems in place to manage disputes, enforce accountability, and protect all parties involved in the transaction.” For more information on Chargebacks911, visit www.chargebacks911.com.

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About Chargebacks911
Chargebacks911® is the global leader in chargeback prevention and remediation technology. As a platform provider to merchants and financial institutions, Chargebacks911 is the first global company fully dedicated to providing an end-to-end platform specifically designed to counter post-transactional fraud and chargeback misuse. Today, Chargebacks911 safeguards more than 2.4 billion transactions per year on behalf of clients in nearly 100 countries around the world, supporting over 2.5 million merchants. For details on Chargebacks911’s comprehensive dispute management solutions, visit chargebacks911.com.

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Source: Company press release.

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