PCI Security Council's Middle East expansion targets payment fraud

Thursday 2 May 2024 11:14 CET | News

The PCI Security Standards Council (SSC) has announced plans to extend its operations to the Middle East, aiming to tackle the growing threat of payment card fraud in the region.

The move follows a surge in card-based transactions, accompanied by an increase in fraudulent activities.

PCI Security Council targets payment fraud with Middle East expansion

In April, the PCI SSC appointed a regional director for the Middle East, tasked with collaborating with local regulators, banking institutions, financial organisations, and service providers to improve the security of card transactions. This decision aligns with projections from the ‘Nilson Report,’ forecasting global card fraud to reach USD 36 billion by 2024, compared to USD 28 billion in 2020, although the fraud-to-transaction ratio is expected to decrease slightly.

The initiative coincides with significant shifts in the payment industry, including the proliferation of alternative payment methods alongside traditional cards. According to a report by the Boston Consulting Group, the global payments industry is poised to grow at an annual rate of 6.2% through 2027, with alternate payment methods expanding at twice the rate of card-based transactions.

Middle East consumers exhibit a preference for digital wallets over traditional cards, reflecting broader global trends. McKinsey & Company's report highlights a 60% preference for digital wallets among Middle East consumers compared to 27% for cards.

Fighting fraud: innovations in Middle East payment security

However, the transition to digital payments has attracted cybercriminal attention, prompting concerns among businesses in the region. The ‘2023 Fraud and Financial Crime Report’ by consultancy Kroll reveals that seven out of ten business executives in the UAE anticipate worsening financial crime risks in the coming year.

To address evolving threats, the PCI SSC introduced the PCI Mobile Payments on COTS (MPoC) standard in November 2022, catering to the rise of mobile app-based payments.

Efforts to combat payment fraud in the Middle East include initiatives such as the Tazama Project, focused on developing antifraud platforms for banks and governments, and the adoption of AI-powered fraud-prevention solutions by entities like Network International.

As businesses prioritise data security and invest in cybersecurity technologies, including generative AI for fraud detection, the PCI Security Standards Council's expansion signifies a concerted effort to fortify the region's payment ecosystem against emerging threats.

Navigating global dynamics: the Middle East's role in payment fraud mitigation

In the realm of payment security and fraud prevention, global trends reflect a dynamic landscape shaped by evolving technologies, shifting consumer preferences, and increasingly sophisticated cyber threats. According to industry reports, the proliferation of digital payment channels has led to a corresponding rise in fraudulent activities worldwide. The shift towards online and mobile payments has expanded the attack surface for cybercriminals, who exploit vulnerabilities in digital infrastructure to perpetrate fraud schemes. From phishing attacks and malware infections to sophisticated social engineering tactics, the methods employed by fraudsters continue to evolve, posing significant challenges to financial institutions and businesses across the globe.

Amidst these challenges, the Middle East has emerged as a focal point in the global effort to mitigate payment fraud. While the region boasts a rapidly growing digital economy and widespread adoption of mobile payment technologies, it also faces unique security risks and regulatory challenges. Industry stakeholders in the Middle East are increasingly recognising the importance of collaboration and innovation in combating fraud, with initiatives such as the expansion of the PCI Security Standards Council's operations serving as a testament to the region's commitment to enhancing payment security. By aligning with broader global trends and leveraging cutting-edge technologies, the Middle East seeks to fortify its payment ecosystem and safeguard against emerging threats, thus ensuring the continued growth and resilience of its financial infrastructure.

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Keywords: payment fraud, expansion, transactions , regulation, banks
Categories: Fraud & Financial Crime
Companies: PCI Security Standards Council
Countries: Middle East
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Fraud & Financial Crime

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