- Until August,
UPIAregistered over 30 billion transactions worth Rs 51.74 trillion for FY23. Online payment fraudincludes losses on sales of digital goods, physical goods, money transfer transactions and banking, as well as airfare and other purchases.
- A report recommends that fraud prevention vendors focus on building platforms that provide AI-powered, risk-based scoring that best suits changing market conditions.
As a result of the increasing use of digital wallets, the total cost of e-commerce fraud to merchants is likely to exceed $48 billion globally by 2023, from just over $41 billion in 2022, a report found on Wednesday.
This growth will be accelerated by the increasing use of alternative payment methods, such as digital wallets and BNPL (buy-now-pay-later), which present new fraud risks.
In FY23 (to August), UPI recorded over 30 billion transactions worth Rs 51.74 trillion.
Online payment fraud includes losses in the sale of digital goods, physical goods, money transfer transactions and banking, as well as purchases such as airline tickets.
Fraud attacks can include phishing, corporate email compromise, and social engineered fraud.
“To combat this fraud, e-commerce merchants need to implement simple steps, such as address verification, combined with risk-based transaction scoring, which will help merchants best mitigate the massive fraud threats,” study author suggested.
The report recommends that fraud prevention vendors focus on building platforms that provide AI-based, risk-based scoring, which can be payment method independent, to best respond to changing market conditions.
In addition, the study found that the potential for fraud with BNPL poses a high risk in the future.
Given the delayed nature of BNPL payments, fraudsters can make several illegitimate payments using stolen card details before the fraudulent activity is identified, posing significant risk.
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