APP Scams Emerge as the Top Payments Fraud Threat With Fraudsters Changing Tactics, Finds ACI Worldwide Report
15 Junho 2023 - 3:00AM
Business Wire
- According to ACI's 2023 Prime Time for Real-Time report, the
top three fraud tactics in 2022 are Authorized Push Payment (APP)
scams, card fraud, and identity theft, with APP scams being the
number one fraud tactic.
- Financial crime and fraud are perennial problems for banks and
financial institutions, with the global cost of fraud predicted to
be $40.62 billion by 2027.
- Developed real-time payment markets are suffering an epidemic
of APP scams, but real-time payments can be the most secure payment
method.
- Banks and financial institutions can stay ahead of fraudsters
and reap the benefit of real-time payments by collaborating and
bringing the power of data science and AI.
One in every five global consumers surveyed in 2022 said they
fell victim to payments fraud in the last four years — 26.9% of
whom are victims of Authorized Push Payment (APP) scams, which is
the number one fraud threat globally — according to the 2023 Prime
Time for Real-Time report published by ACI Worldwide (NASDAQ:
ACIW), a global leader in mission-critical, real-time payments
software, in partnership with GlobalData, a leading data and
analytics company.
APP scams happen when scammers coerce legitimate users to
initiate a payment to a destination account under their control.
APP scams can take many forms, the most common being social
engineering — such as phishing or impersonation scams. Push
payments offer rapid settlement and reconciliation for faster
payment services and real-time payment systems. While the window of
opportunity to catch fraud is shorter, advanced AI capabilities
coupled with the rich data that ISO 20022 enables and the signals
that the digital channels and devices provide allow for
unprecedented precision and speed in detecting and addressing
fraudulent activities.
"APP scams are on the rise as fraudsters exploit human
vulnerabilities and weaknesses in bank controls to manipulate mule
accounts to receive funds from fraudulent activities and facilitate
further illicit transactions. Banks need to safeguard their
customers and revenue by shifting their focus from relying on
traditional measures designed to prevent check or card fraud. They
need to arm themselves with the right fraud strategies to
capitalize on the security of the real-time payment rails and reap
the benefits of real-time payments without fraud management
becoming a cost-center," said Cleber Martins, head of payments
intelligence and risk solutions, ACI Worldwide.
Unity is strength in combatting
scams
More than £1.2 billion in the U.K. were stolen through fraud in
2022, with over one-third contributed by APP scam losses. In June
2023, the U.K. Payment Systems Regulators announced new
reimbursement requirements for APP scams within the Faster Payments
system. It requires payment firms to reimburse all in-scope
customers who fall victim to APP fraud with a cost-sharing of 50:50
between sending and receiving payment firms. The banking industry
needs a united front against APP scams, and with the regulators
stepping in, it provides a stronger impetus for financial
institutions to collaborate and shut fraudsters down.
In Australia, disrupting scams is the government's strategic
priority. Australians lost more than AU$ 3 billion to scams in
2022. In May 2023, the Australian Banking Association announced the
new Fraud Reporting Exchange platform, allowing banks to halt
multiple fraudulent transactions as part of the same scam and share
intelligence to assist with loss-prevention efforts. In the June
2023 report "A Strategic Plan for Australia's Payments System," the
government has committed to a long-term, coordinated approach
bringing together industry players to enable disruption of scams
through better collaboration and information sharing. It outlines a
plan to establish the National Anti-Scam Centre and develop
cross-sectoral, industry anti-scam codes for banks,
telecommunications and digital platforms.
Other markets have had to watch APP scams grow to epidemic
proportions before scrambling to tackle the problem after the fact.
The launch of the FedNow® Service is expected to be a significant
catalyst for real-time payments growth in the U.S., with the volume
of real-time payments projected to grow at a CAGR of 32.6% between
2022 and 2027. With the launch of the FedNow Service coming soon,
the banking and finance industry in the U.S. is in a prime position
to modernize its risk management technology and to collaborate and
strengthen its controls to implement robust fraud strategies.
Beat scammers through technology
modernization
In the report "Real-Time Payment Fraud Trends and How To Fight
Them in Three Simple Steps," ACI outlines the three steps to combat
real-time payments fraud:
- Protect enterprise-wide transactions with contextualized
decisioning and cross-industry collaboration
- Accelerate decision-making with machine learning
- Strengthen the weakest link with two-way communication
Deploying the right tools to send risk signals, with privacy
designed into the process, allows banks and financial institutions
to protect customers from all corners without impeding a seamless
customer experience.
Inside Real-Time Season 3 – Unmasking
the Many Faces of Fraud
This year, ACI launched Inside Real-Time — a new, multi-channel
media platform — as the definitive guide and go-to source for the
world's real-time payment stories, including exclusive content
exploring the latest developments and opportunities in the world of
real-time payments and how real‑time is empowering consumers,
merchants, businesses and banks. In the new four-part video series
of season 3 focusing on fraud management, each episode unmasks the
many faces of fraud associated with real-time payments and shares
guidance for industry players looking to better protect themselves
and their customers.
Note to editors: Different markets
may use different terminology to refer to APP scam, such as "APP
fraud," "Scams," "Confidence tricks" and "PIX fraud."
About ACI Worldwide
ACI Worldwide is a global leader in mission-critical, real-time
payments software. Our proven, secure and scalable software
solutions enable leading corporations, fintechs and financial
disruptors to process and manage digital payments, power
omni-commerce payments, present and process bill payments, and
manage fraud and risk. We combine our global footprint with a local
presence to drive the real-time digital transformation of payments
and commerce.
© Copyright ACI Worldwide, Inc. 2023
ACI, ACI Worldwide, ACI Payments, Inc., ACI Pay, Speedpay and
all ACI product/solution names are trademarks or registered
trademarks of ACI Worldwide, Inc., or one of its subsidiaries, in
the United States, other countries or both. Other parties'
trademarks referenced are the property of their respective
owners.
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Media Contact:
Nick Karoglou I Head of Communications and Corporate Affairs I
nick.karoglou@aciworldwide.com
Lyn Kwek I Communications and Corporate Affairs Director,
APAC/South Asia I lyn.kwek@aciworldwide.com
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