According to a report by ACI Worldwide, authorized push payment (APP) scam losses are set to surge to $7.6bn by 2028 across six key real-time payment markets: the U.S., U.K., India, Brazil, Australia, and the UAE.
This alarming rise highlights the growing sophistication of financial scammers who exploit the speed of real-time payments to orchestrate fraud, often bypassing traditional security measures.
The report underscores a stark prediction with APP scam losses through real-time payments expected to grow at a compound annual growth rate (CAGR) of 17% from 2023 to 2028, significantly outpacing the general rate of 12% for total APP scam losses globally. Such scams, which leverage the victims’ trust to initiate transfers to fraudsters, are notoriously difficult to detect as they mimic legitimate transactions.
Financial institutions are facing an erosion of customer trust, with the report revealing that 25% of scam victims are likely to switch banks, and approximately 20% may close their accounts entirely without reopening new ones. The pressing need for robust fraud prevention systems is more apparent than ever, with government mandates imposing penalties for non-compliance and demanding reimbursement for victims.
ACI Worldwide’s head of payments intelligence and risk solutions, Cleber Martins, emphasized the critical need for a collective approach to combating these scams. “Integrating AI in financial services is a double-edged sword, both in enabling sophisticated financial crimes and fortifying defenses against them. The rise of real-time payment APP scams requires a coordinated cross-industry defense to share precise and collective intelligence in real time,” he explained.
The Scamscope report also provides a detailed analysis of APP scam trends across the six markets, with notable findings for each country:
- Australia is seeing a deceleration in scam growth due to better collaborative efforts, projected at a 7.6% CAGR.
- Brazil reports nearly one in three citizens as victims, with scam losses expected to rise by 40%.
- India shows promise in controlling scams better than other nations, despite its high volume of real-time payment transactions.
- The UAE is experiencing an uptick in investment and SMS-based fraud, with losses potentially tripling.
- The U.K. has successfully reduced APP fraud losses year-over-year, attributed to effective prevention measures and new regulations.
- The U.S. faces significant challenges, with APP scams expected to disproportionately affect its burgeoning real-time payment landscape.
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