In today’s digital payments ecosystem, businesses, banks and consumers alike want access to their money as fast as possible. While person-to-person (P2P) payment solutions and real-time payment platforms are making the quick exchange of funds possible, fraudsters also see an opening to exploit these systems’ vulnerabilities.
While the faster speed of payments is clearly appealing for users, there is now less time available to catch fraudsters as they attempt to steal funds. The new Digital Fraud Tracker™ highlights the latest developments in payments fraud, and how different companies are working to keep funds safe from bad actors as payment solutions grow increasingly faster.
Around the World of Digital Fraud
In India, a new real-time payment service was recently introduced by eCommerce giant Amazon. Amazon Pay UPI, developed in collaboration with Axis Bank, was released to Android users in that country. The service aims to allow users to securely transfer money between bank accounts using India’s UPI system. To keep transfers secure, the service requires customers to provide their Axis Bank-assigned UPI IDs and PIN codes, and uses Amazon KYC processes to ensure the authenticity of transactions.
Meanwhile, in Australia, acts of card-not-present (CNP) fraud are rising in the nation’s rural areas. The Australian Payments Network noted that CNP fraud incidents rose by 76 percent last year. Rural areas, where residents are more likely to shop online, appear to be targeted for online data theft. These thefts cost Australian residents roughly $249 million AUD ($176.3 million USD).
Australia’s CNP fraud problems seem to be part of a broader pattern. A recent report from Experian found that eCommerce chargeback fraud is growing at twice the rate of eCommerce sales. This type of fraud is particularly difficult for online merchants, which must absorb the financial costs of disputed credit card transactions. The report urges online merchants to tighten their security protocols, including CVV validations and address confirmations.
The rise of real-time payment systems, including P2P platforms, has made certain types of fraud more appealing to cybercriminals. This includes account takeovers, which allow cybercriminals to take control over legitimate accounts. Another type of fraud tricks legitimate workers into acting as “money mules” to unknowingly finance illegal activities.
This month’s Tracker includes a Deep Dive on the security challenges that real-time payment systems can present, and the tools being used to keep customers safe.
Protecting Credit Union Members from P2P Fraud
Not even P2P services like Zelle are immune to fraud. Fraudsters have managed to trick Zelle users into approving transfers under false pretenses, leaving the account owners liable for the losses.
For the March feature story, Amy Hsu, vice president of product management and research analytics for SchoolsFirst Federal Credit Union, explained how the credit union works to educate members on using Zelle wisely, as well as how it keeps the service seamless for users and secure from fraudsters.
About the Tracker