As payments fraud protection programs get more sophisticated, fraudsters are switching up their tactics

Article by Grace Broadbent | Nov 22, 2024

The news: Fraudsters targeting the payments industry are focusing more on attacks on consumers instead of through payments systems.

Digital payments fraud made up 11.6% of all losses in the financial industry in 2024—plummeting from 26.7% in 2023.
Relationship and trust scams made up 11.8% of losses, up from 6.3% in 2023.
And the share of product and service scams, where the authorized party was manipulated, increased from 5.8% in 2023 to 15.1% in 2024.

Why this matters: Payment players have been investing heavily in fraud-protection services.

Mastercard acquired cybersecurity firm Recorded Future for a whopping $2.65 billion in September, and Visa acquired AI-based fraud prevention firm Featurespace.
Google Wallet, Apple Wallet, and PayPal have also all beefed up their fraud protection services this year.

But as payment players invest more in these protections, fraudsters can't rely on their old tactics. That’s why they are instead relying on scams that involve consumer deception.

Our take: In addition to their investments in fraud protection systems, payment players should also spend money on education campaigns to help their customers identify and stop scams.

These campaigns will not only help their customers protect themselves—they also help avoid losses that fall on them to repay and the support costs from helping customers resolve these issues.

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