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Banks will have the power to pause payments for up to four days to give them more time to investigate fraud, the government has said.
Currently, transfers must be processed or declined by the end of the next business day, but the new law will allow an extension of three more days.
For years, banks have needed to have reasonable grounds to suspect fraud before being able to investigate but have also faced pressure from customers who want payments to be made instantly.
The long-proposed new regulations will come into force at the end of October - later than originally planned.
The previous government's draft legislation had proposed giving banks the new powers by 7 October, but now they will take effect from the end of the month.
Romance fraud
Fraud is the most common offence in the country, accounting for a third of all crime in England and Wales.
Criminals have stolen billions of pounds through romance scams or by impersonating a genuine trader to trick victims into transferring money.
Banks have lobbied for permission to take longer to agree to payments, to allow them to investigate suspicious transfers.
The new law will give them time to look at unusual spending patterns, contact a customer, and investigate further before the money is transferred.
Ben Donaldson, managing director of economic crime at UK Finance, which represents the banking industry, thinks the new law will be used "fairly sparingly".
"This is really relevant to cases of investment fraud and romance fraud where there is psychological manipulation of the victim," he told the BBC's Today programme.
Some groups have said the powers should be used in a careful and targeted way.
The Society of Licensed Conveyancers said it was “deeply concerned” that a four- day freeze could be catastrophic for people who are buying a home and have to transfer large amounts of money quickly.
But Mr Donaldson said: "We will only use this power where we’ve got reasonable grounds to suspect it is a fraud."
Banks will need to inform customers when a payment is being delayed, explain what the customer needs to do in order to unblock the payment and pay compensation if the delay lands the customer with extra charges.
The rules will come into force a few weeks after the introduction of a stricter mandatory scheme on fraud compensation. Those new powers, which come into force on Monday, will see fraud victims receiving up to £85,000 in refunds from banks within five days of an authorised push payment scam.
The maximum compensation has been reduced from a previous proposal of £415,000.
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