ACI Worldwide reports APP scams as top payments fraud threat

Friday 16 June 2023 12:24 CET | News

ACI Worldwide has issued a report in partnership with GlobalData showcasing APP scams as the top payment fraud threat in 2022, followed by card fraud and identity theft.


One in every five global consumers surveyed in 2022 confirmed to have fallen victim to payments fraud within the past four years, 26.9% of whom were victims of Authorised Push Payment (APP) scams, which is the number one fraud threat globally, as per the 2023 Prime Time for Real-Time report published by ACI Worldwide.

ACI’s findings on APP scams and financial crime and fraud

Financial crime and fraud are recurring problems for banks and financial institutions, with the global cost of fraud estimated to reach USD 40.62 billion by 2027. Developed real-time payment markets are experiencing an epidemic of APP scams, yet real-time payments can be the most secure payment method, and banks and Fis can stay ahead of fraudsters and benefit from real-time payments by collaborating and leveraging the power of data science and AI.

APP scams take place when scammers coerce legitimate users to initiate a payment to a destination account under their control and can take place in a multitude of forms, with the most prevalent ones being social engineering – be that phishing or impersonation scams. Push payments provide quick settlement and reconciliation for expedited payment services and real-time payment systems. Although the time to catch fraud is shorter, advanced AI capabilities together with extensive data enabled by ISO 20022 and the signals provided by digital channels and devices make possible unprecedented precision and speed in detecting and addressing fraudulent activities.

ACI Worldwide reports APP scams as top payments fraud threat

Cleber Martins, head of payments intelligence and risk solutions at ACI Worldwide advised that APP scams are increasing as fraudsters exploit human vulnerabilities and weaknesses in bank controls to manipulate mule accounts to receive funds from fraudulent activities and facilitate additional illicit transactions. Per their statement, banks should safeguard their customers and revenue by no longer focusing on leveraging traditional measures designed to prevent check or card fraud, but on the appropriate fraud strategies to capitalise on real-time payment rails’ security and benefit from real-time payments without having fraud management be a ‘cost-centre’.

Throughout 2022, in the UK over GBP 1.2 billion was stolen through fraud, with more than a third contributed by APP scam losses. In June 2023, the UK Payment Systems Regulators made public new reimbursement requirements for APP scams within the Faster Payments system. When talking about Australia, disrupting scams comes as the government’s strategic priority, as Australians lost over AUD 3 billion to scams in 2023. In May 2023, the Australian Banking Association announced the Fraud Reporting Exchange platform enabling banks to halt multiple fraudulent transactions as part of the same scam and share data to assist with loss-prevention efforts.

In the US, the launch of the FedNow Service is expected to be a catalyst for real-time payments growth in the region, with their volume projected to increase at a CAGR of 32.6% between 2022-2027. With the launch of the FedNow Service approaching, the banking and finance sector is placed in a prime position to modernise its risk management tech and to collaborate and strengthen its controls to implement extensive fraud strategies.

For more information about ACI Worldwide, please check out their detailed profile in our dedicated, industry-specific Company Database.

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Keywords: partnership, research, report, financial crime, real-time payments, APP fraud, card fraud, identity theft, cybercrime, financial institutions, banking, payments , social engineering, phishing, scam
Categories: Fraud & Financial Crime
Companies: ACI Worldwide, GlobalData
Countries: World
This article is part of category

Fraud & Financial Crime

ACI Worldwide



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