Tulsi Narayan, Senior Vice President Cyber & Intelligence, Europe at Mastercard delves into the prevalent types of payment scams targeting consumers, particularly travellers, and explores the evolution of these scams over time.
Tulsi highlights innovative solutions and proactive measures employed by Mastercard to combat fraud, with a focus on the pivotal role of artificial intelligence (AI). Additionally, she offers practical tips for consumers to protect themselves and discusses the regulatory actions being taken to address these pervasive issues.
Payment scams targeting consumers, particularly those traveling, have become increasingly sophisticated. One prevalent tactic involves digital skimmers embedded discreetly within online checkout pages. These malicious tools are designed by hackers to quietly intercept sensitive information such as card account numbers, CVV security codes, expiration dates, and personal details from legitimate merchant websites.
To make matters more complex, scammers are now using artificial intelligence (AI) to up their game. It helps them automate and refine their scams, making it easier to pinpoint vulnerable victims and carry out fraudulent transactions faster and with precision. This presents a significant challenge to security measures, necessitating ongoing vigilance from consumers and financial institutions alike.
Absolutely, there are a lot of simple things consumers can do to reduce risk. For example, we advise that people be cautious about sharing travel plans on social media before they leave or during, keep location information secret until they’re back. When booking, stick to reputable sites – cheap deals tempt us all, but things that are too good to be true almost always are exactly that.
In common with general cybersecurity, avoiding public and unsecured Wi-Fi is valuable. Make sure you keep devices up-to-date and make use of multi-factor authentication, like a face or fingerprint, and back that up with an authenticator app. There’s some more advice on our Perspectives article.
Payment scams have evolved significantly, both in their prevalence and complexity. Today's scammers are highly sophisticated, employing diverse methods such as smishing (SMS phishing), impersonation scams, and imposter schemes to deceive individuals. They exploit technological advancements to propagate fraudulent activities through emails, texts, social media, and phone calls, posing serious financial risks to unsuspecting consumers.
In 2023, fraud costs in the U.S. alone surpassed USD 10 billion, marking a record high. Similarly, the UK reported nearly 2.9 million fraud cases in = 2023, equating to almost one theft every 11 seconds. These statistics show the alarming scale and impact of modern payment scams globally.
What makes things even more challenging is the convenience and speed of digital real-time payments. Once funds are transferred, they are often irrevocable, and scammers can quickly move stolen money, complicating efforts to recover losses and protect consumers.
Over the past decade, Mastercard has been at the forefront of utilising AI. Our AI-powered solutions have successfully prevented over USD 20 billion in fraud losses in the last year alone.
We've integrated AI into our solutions, covering everything from biometric and identity verification to real-time transaction scoring. AI-powered algorithms can analyse transaction patterns and tailor payment experiences to individual users.
Biometrics have also become more prevalent – such as fingerprint and facial recognition – which retailers can offer in their checkout process to verify identities and prevent unauthorised transactions.
At Mastercard, we ensure to combine advanced technologies—AI, biometrics, and open banking capabilities—to offer robust protection against various types of scams, from card-based fraud to fraudulent account openings. This integrated approach not only safeguards consumers but also contributes to a smoother and more secure payment experience throughout their customer journey.
Protecting against scams demands a multi-layered strategy. Our Identity Solutions portfolio enhances security across all financial transactions by leveraging identity, device, behavioural biometrics, and transaction data powered by advanced AI technology. We continuously invest in product development to enhance data accuracy and capabilities, ensuring robust detection and prevention of scams while enhancing the customer experience.
In the UK, we've collaborated closely with banks to proactively predict scams in real time, preventing funds from leaving victims' accounts. Our Consumer Fraud Risk solution for example uses AI to analyse transaction details like account names, payment amounts, and transaction histories, enabling us to provide timely alerts and stop fraudulent payments before losses occur.
Through our Scam Protect program, we focus on detecting and preventing scams at every stage of their lifecycle. Our Identity network analyses billions of data points in real-time and allows us to evaluate the identities of both senders and receivers.
Regulatory actions to tackle fraud and scams are evolving amid increasing consumer expectations for robust protection from financial institutions. There's mounting pressure on banks to safeguard both individual consumers and businesses from fraudulent activities, which continue to pose significant challenges.
In response, payment actors are prioritising initiatives to empower customers to protect themselves against fraud. Collaborations within the industry are also gaining momentum. For instance, at Mastercard, we have been partnering with organisations like the Global Anti-Scam Alliance to establish global security standards aimed at safeguarding consumers worldwide. By working together, we aim to create a safer environment and enhance fraud prevention measures across the financial ecosystem.
In-store, retailers now offer biometric checkout which offers customers the ability to use biometrics to identify themselves and pay for in-person purchases, without using a payment card or mobile device. Not only does it make the payment process quicker, but consumers can also have a piece of mind with an added security layer.
Using contactless or mobile wallets like Apple Pay or Google Wallet make use of tokenisation, which is more secure and we also suggest consumers use real-time alerts for transactions which can significantly enhance security. AI-powered fraud detection services provided by banks and credit card companies help identify and prevent suspicious activities in real-time, without consumers needing to worry.
Other effective practices include secure browsing, regularly monitoring account activity, and using password management tools to create and store strong, unique passwords.
About Tulsi Narayan
Tulsi joined Mastercard in 2018 to lead the European Commercial Payments and New Payment Platforms business for Europe, before moving to manage the Cyber & Intelligence business line for Europe.
Prior to joining Mastercard, Tulsi spent 10 years in strategy consulting firms including Bain and AT Kearney and 6 years in Corporate Banking at Lloyds Bank in the UK.
About Mastercard
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart, and accessible. Using secure data and networks, partnerships and passion, our innovations, and solutions help individuals, financial institutions, governments, and businesses realise their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now