The index based on a global network of over 34,000 sites and apps and a poll of over 1,000 consumers, reveals that payment fraud attacks across fintech increased by 70% in 2021, the greatest increase of any category in the network.
Payment fraud has increased in tandem with a whopping 121 percent year-over-year increase in fintech transaction volumes on Sift's network, making this industry a tempting target for cybercriminals.
These escalating attacks, as per this data, were mostly focused on alternative payments such as digital wallets, which witnessed a 200 percent increase in payment fraud, as well as payments service providers (+169 percent) and cryptocurrency exchanges (+140 percent).
These approaches were targeted towards buy now/pay later (BNPL) providers, which showed a 54 percent increase in fraud attack rates year over year.
Sift's Trust and Safety Architects discovered a rising number of fraud schemes on Telegram in late 2021, providing unlimited access to BNPL accounts via fake credit card numbers and compromised email addresses, demonstrating the wide range of methods fraudsters use to target the whole fintech sector.
Along with a 23 percent increase in blocked payment fraud assaults in 2021, Sift noticed a network-wide rise in daily transaction volumes across all industries.
Similarly, 49 percent of poll respondents indicated they've been a victim of payment abuse in the last one to three years, with 41 percent of those who have been victims in the last year alone. Financial service websites were regarded as the sites that pose the most risk by 33% of the victims, which could have a detrimental impact on the customer’s trust.
Jane Lee, Trust and Safety Architect at Sift. stated, “Many brands fail to realize that the damage of payment fraud goes beyond the initial financial impact. The vast majority of consumers report abandoning brands after they experience fraud on a business’s website or app, diminishing customer lifetime value and driving up acquisition costs. Further, potential customers who see unauthorized charges from a particular company on their bank statements will forever associate that brand with fraud. In order to combat these attacks and grow revenue, businesses should look to adopt a Digital Trust & Safety strategy—one that focuses on preventing fraud while streamlining the experience for their customers.”
