Fraud is top-of-mind for payment providers and the businesses and consumers they serve — for the simple reason that the cost of ignoring it is too much to bear. A recent report from the Federal Trade Commission (FTC) pegged fraud loss in 2022 at $8.8 billion, an increase of more than 30% from the previous year. Not all types of fraud are created equal, however, and one of the most important differentiators is the type of payments they target.
Credit push payments are inherently safer than debit pull payments. The core difference between the two methods is that credit push payments involve payers instructing their banks to send money from their accounts to recipients’ accounts. In contrast, debit pull transactions have recipients’ banks extract money from payers’ accounts. Both payment types are vulnerable to different kinds of fraud and are vital to secure against bad actors.
The “Real-Time Payments Tracker®” examines the technology and regulatory solutions that can keep peer-to-peer (P2P) payment fraud at bay.
A recent report found that attempted fraud transactions skyrocketed by 92% between 2021 and 2022, with attempted fraud dollar amounts spiking by a massive 142%. This fraud was not limited to a single channel, instead affecting a variety of different payment methods. Some of the most pressing threats were account takeover fraud, attempted authorized payment fraud and new account fraud.
A recent survey of bank executives pinpointed P2P and other digital fraud as the top threat. The four biggest U.S. banks have recently reported more than 190,000 scams in which bad actors tricked victims via Zelle. The second-most widely feared threat was data breaches, which affected more than 9 million consumers last year. Other top threats included ransomware and third-party vendor breaches.
For more on these and other stories, visit the Tracker’s News and Trends section.
Push payments are typically considered much more secure than their pull payment counterparts, but they are far from invincible. Banks and payment providers looking to combat push payment scams must deploy data-driven solutions to prevent their customers from being victimized.
To get the Insider POV, we spoke with Lee Kyriacou, vice president of real-time payments at The Clearing House, to learn more about push payment fraud prevention.
Fraud is a constant worry for companies of all types, driven by the sheer variety of fraud methods that bad actors deploy. Man-in-the-middle attacks, social engineering, account takeovers and botnets are just some of the thousands of different types of fraud that keep CEOs up at night — and the bad actors’ techniques are only growing more sophisticated by the day. The damage fraud can cause is not limited to companies’ finances and data: It can also impact their reputations.
This month, PYMNTS examines the economic and reputational harms fraud can wreak on P2P applications and how technological solutions can keep fraud to a minimum.