PayPal has rolled out AI-enabled, dynamic scam detection for PayPal and Venmo Friends and Family payments, aiming to scale protection for customers across the globe.
Developed to proactively alert customers in case of potential scams and prevent losses in real time, the newly added alerts intervene before any funds are sent. With scammers working on coercing individuals into sending payments that may not be eligible for refunds, including scams that originate on social media, PayPal intends to equip customers with more information and allow them to stop scams before they happen.
Following other initiatives focused on similar issues, PayPal now seeks to combat the evolving tactics of scammers. The company plans to work to safeguard its customers through several measures, including shutting down fraudulent accounts and blocking suspicious activity. Additionally, its approach to addressing fraud is multi-pronged, made up of building advanced technologies, utilising investigative research led by its team, and optimising its risk controls to prevent bad actors from accessing its platforms. Considering that fraudsters tend to frequently change their methods to evade detection, PayPal intends to stay ahead of their moves and continually augment its tools.
Dynamic, AI-powered alerts
When designing PayPal’s dynamic alert system, the company centred its efforts on effective fraud mitigation strategies and improving the user experience. The newly included alerts pop up when the system identifies a potential scam, sharing critical and relevant information about the likelihood of fraud at the point of payment. Also, the alerts learn and adapt based on scam tactics, while PayPal’s system utilises continually learning AI models to analyse data points and update when patterns change. This creates a system that can help more effectively detect a potential new scam, even if that specific scam has never been seen before.
Furthermore, compared to traditional static warnings, PayPal’s alerts are dynamic and personalised to be shown based on the likelihood of fraud for each transaction. The system shares messages that reflect the risk level of the payment customers are conducting. At the same time, the technology sends gradually stricter alerts as its confidence that a scam is real grows and adds more complexity to completing payments for higher-risk cases.
Currently, PayPal’s alerts are live in all worldwide markets in which the company provides its services, as well as across the US on Venmo.
