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BPFI data shows increase in payment fraud in ireland
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Fraudsters stole nearly €85 million (€84.6m) through frauds and scams in Ireland during 2022, an increase of 8.8% on 2021, according to a detailed report published by FraudSMART, the fraud awareness initiative led by Banking & Payments Federation Ireland (BPFI).

The FraudSMART Payment Fraud Report H2 2022 outlines how card fraud accounted for over 95% of fraudulent payment transactions by volume but only 40% of fraud losses at €33.4m.

Most of the increase was driven by online card fraud or ‘card not present’ fraud where a criminal uses the victim’s compromised card information to make an online purchase (up by 24% in value year-on-year to €27.1m in 2022).

The report also highlights the continued rise in value of unauthorised electronic transfers (primarily payments through mobile and online banking) which accounted for almost 39% of fraud losses at €32.8m, but less than 4% of transaction volumes. Meanwhile, there was a 19% decrease in authorised push payment (APP fraud) transactions in 2022 compared to 2021, and APP fraud losses dropped by 41% to €9.9m, the lowest value since the data became available in 2019.

The report comes as FraudSMART warns consumers to be on high alert as text message fraud, known as smishing, continues to become more prevalent. A recent survey by FraudSMART revealed that this type of fraud is now the dominant channel for fraud attempts, with 1 in 2 adults having received fraudulent text message in the previous 12 months. These text messages often include a link and sense of urgency requiring immediate action.

Niamh Davenport, Head of Financial Crime, BPFI said: “[The] figures show that card fraud continues to account for the vast majority of fraudulent payment transactions at 95% of the total volume although these transactions tend to represent lower levels of losses on average. On the other hand, other fraud types have relatively low volumes but would have higher average losses, particularly any fraud that leads to account takeover where the fraudster takes control of your main bank account by tricking you into handing over your bank log in details, which we have seen recently through text message scams.

“Conversely, we also see from today’s report that there was a 19% decrease in authorised push payment (APP fraud) transactions in 2022 compared to 2021. APP fraud can happen when a scammer tricks a consumer into sending money directly from their account to an account which the criminal controls. Examples of this include investment scams such as fake cryptocurrency schemes or romance, holiday or accommodation scams. The decrease in this type of fraud might be attributed to increased consumer awareness or a post-Covid shift, as we have gradually returned to meeting in-person with decreased dependency on online communication. However, figures across all types of financial fraud can fluctuate as fraudsters continually adapt their behaviours and methods.

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HOW TO: Implement anti-fraud measures for digital payments
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In today’s digital era, businesses must be vigilant in protecting their payment systems against fraudulent activities. Establishing robust anti-fraud measures is vital to safeguard both your business and your customers. Here are key steps you can take to implement effective anti-fraud measures for digital payments…

The first step is to educate and train your staff. Employees should understand the risks of digital payment fraud and be aware of the latest fraud tactics. Regular training sessions can keep staff updated on best practices for identifying and reporting suspicious activities.

Next, consider implementing multi-factor authentication (MFA). MFA adds an extra layer of security by requiring users to provide at least two forms of verification before a transaction can be approved. This could be something they know (like a password), something they have (like a mobile device), or something they are (a biometric factor).

A key measure is investing in robust encryption technology. Encryption converts payment data into a code that can only be deciphered by those with the correct decryption key. This helps protect sensitive information from being intercepted during transactions.

Investing in fraud detection software that utilises Artificial Intelligence (AI) and Machine Learning (ML) is another crucial step. These technologies can analyze vast amounts of transaction data in real time, identifying patterns and anomalies that may signal fraudulent activity. They continuously adapt to new fraud tactics, improving their detection capabilities over time.

You should also consider implementing a secure customer authentication protocol. This could involve behavioral biometrics, which analyzses unique patterns in a user’s behavior, such as keystroke dynamics or mouse movement, to verify their identity.

Employing a firewall and maintaining up-to-date antivirus software is vital. These tools can protect your network and systems from malware or phishing attacks, common tactics used by cybercriminals to steal payment information.

Lastly, develop a robust incident response plan. Despite your best efforts, breaches can still occur. An incident response plan outlines the steps to take in the event of a breach, enabling you to react swiftly to mitigate damage and recover quickly.

Implementing anti-fraud measures for digital payments involves a combination of education, advanced technology, and vigilant practices. The goal is not only to prevent fraud but also to create an environment that fosters trust between your business and your customers.

In an increasingly digital world, safeguarding digital payments is not just a necessity but a responsibility that every business must bear.

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Cryptocurrencies proving resilient, but ‘face challenges’ on road to mainstream acceptance
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In November 2021, the combined market value of all cryptocurrencies soared to a record-breaking $3 trillion. However, adverse macroeconomic circumstances and the collapse of major players, most notably FTX, caused a sharp 64% decline in 2022, plummeting below $800 million. The market has since recovered in 2023, reaching $1.1 trillion, according to GlobalData.

Its latest report, “Thematic Research: Cryptocurrencies,” reveals that despite the volatility, institutional and retail interest in crypto has increased, and governments are positioning themselves as crypto-friendly hubs. The regulatory narrative has significantly shifted, from talks of outright bans to a focus on proper regulation.

Nicklas Nilsson, Consultant, Thematic Intelligence at GlobalData, said: “Tracking the crypto market is challenging due to its polarising nature and fast-paced evolution. GlobalData’s social media analytics indicates that major crypto events regularly spur discussions on social media platforms.”

Amidst the noise, the industry is making progress. The collective market value of cryptocurrencies has seen a near 400% increase compared to pre-pandemic levels, developer activity has reached new heights, and global crypto ownership exceeds 425 million. In addition, institutional interest remains high, as evidenced by BlackRock’s recent filing for a spot bitcoin ETF.

Nilsson added: “In addition, the crypto space continues to experience rapid innovation, from new token types to scalability solutions.”

However, regulation remains a critical issue, acting as a considerable barrier to broader crypto adoption. Many countries have sought to regulate crypto in some way, particularly in the wake of the 2022 crypto crash. Nonetheless, approaches differ widely.

Nilsson explained: “While the regulatory chaos in the US garners most attention, other jurisdictions are taking decisive steps towards providing much-needed clarity for the cryptocurrency industry. The EU leads the way with its Markets in Crypto-Assets (MiCA) bill, introducing tougher but consistent rules across member states by 2025. Additionally, the UK, Singapore, and Japan are actively developing their own crypto regulatory frameworks, reflecting the shift from calls of an outright ban to a regulation-focused approach.

“Cryptocurrencies face numerous obstacles to achieve mainstream acceptance, as they are still in the early stages. For instance, the world’s richest person, Bernard Arnault, could acquire most of the circulating bitcoins, and the total cryptocurrency value is still lower than Amazon’s market cap. The crypto market is expected to remain volatile, but significant changes are anticipated in the coming years. If recent history serves as a guide, progress can be expected amidst all the noise.”

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Staying Ahead of the Game: What’s new in payment fraud detection tools and technology
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In the fast-paced world of digital payments, fraud detection critical. Cybercriminals are constantly evolving their tactics, necessitating more sophisticated tools and technologies to counter these threats. As the sector continues to evolve, several key trends are emerging in payment fraud detection.

Firstly, the use of Artificial Intelligence (AI) and Machine Learning (ML) is transforming fraud detection. AI and ML algorithms can analyse vast amounts of data in real time, identifying patterns and anomalies that may indicate fraudulent activity. They continuously learn and adapt to new fraud tactics, improving their detection capabilities over time. These technologies also allow for predictive analytics, helping to identify potential fraud before it happens.

Secondly, the rise of biometric authentication represents a significant trend. Traditional methods of authentication like passwords and PINs can be stolen or hacked, but biometric data – such as fingerprints, facial patterns, and voice recognition – provide a more secure alternative. The use of biometric authentication in payment processes can greatly enhance fraud detection and prevention.

Another emerging trend is the application of blockchain technology. Blockchain’s decentralised, transparent, and immutable nature makes it a powerful tool for fraud detection. Transactions recorded on a blockchain cannot be altered or deleted, making fraudulent activity easier to trace and harder to execute.

The trend towards multi-factor authentication (MFA) is also gaining momentum. MFA requires users to provide two or more forms of identification before a transaction can be approved. This might include something they know (like a password), something they have (like a mobile device), and something they are (a biometric factor). This layering of security measures significantly reduces the risk of fraud.

Behavioral analytics is another key trend. This technology analyses how a user interacts with a system – their typing speed, mouse movements, device usage patterns, and more. Any deviations from normal behaviour can trigger an alert, helping to identify fraudulent activity.

Lastly, the increasing integration of fraud detection systems is noteworthy. Rather than operating in silos, different fraud detection tools and technologies are being combined into integrated systems. This holistic approach enhances the accuracy and speed of fraud detection, providing a more robust defense against cyber threats.

The trends shaping payment fraud detection reflect a broader shift towards advanced, integrated, and proactive solutions. As these trends continue to evolve, businesses must stay ahead of the curve to protect themselves and their customers from the ever-present threat of fraud.

The ultimate goal remains to build a secure, trustworthy digital payment ecosystem in an increasingly interconnected world.

If you’re on the hunt for fraud detection tools for your business, the Merchant Fraud Summit is here to help!

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Do you specialise in Digital Identity Verification or Multi-factor Authentication? We want to hear from you!
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Each month on Merchant Fraud Briefing we’re shining the spotlight on a different part of the market – and in August we’ll be focussing on Digital Identity Verification & Multi-factor Authentication.

It’s all part of our ‘Recommended’ editorial feature, designed to help industry buyers find the best products and services available today.

So, if you specialise in Digital Identity Verification or Multifactor Authentication and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Jennie Lane on 01992 374 098 | j.lane@forumevents.co.uk.

Here’s our 2023 Features List in full:-

August – Digital Identity Verification & Multifactor Authentication

September – Risk Prevention Solutions & Compliance Solutions

October – Mobile Fraud Prevention & AI for Fraud Prevention

November – Biometrics for Fraud Detection & IP Intelligence/Proxy Detection

December – POS Verification & Chargebacks

For more info, contact Jennie Lane on 01992 374 098 | j.lane@forumevents.co.uk.

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Banking investment in IT set to soar, driven by security
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Global IT spending by banking and investment services is forecast to hit $652.1 billion in 2023, representing an increase of 8.1% from 2022, with spending on software experiencing the largest growth at 13.5%.

“Current economic headwinds have changed the context for technology investments in banking and investment services this year,” said Debbie Buckland, Director Analyst at Gartner. “Rather than cutting IT budgets, organizations are spending more on the types of technologies that generate significantly higher business outcomes. Spending on software, for example, is shifting away from building it in-house, in favour of buying solutions that generate value from investments more rapidly.”

According to the Gartner 2023 CIO and Technology Executive Survey, banking and investment services CIOs will spend the largest amount of new or additional funding in 2023 on cybersecurity, data and analytics, integration technologies and cloud.

More than half plan to increase investments in cloud, while reducing IT spending in their own data centers. This is reflected by slower growth in data center systems spending from 13.2% in 2022 to 5.7% in 2023.

Banks are disengaging from tangible assets and capital expenditure (capex) in favor of adopting services and operating expenditure (opex), to meet evolving customer and market expectations.

Table 1. Worldwide Banking and Investment Services IT Spending Forecast (Millions of U.S. Dollars)

 2022 Spending2022
Growth (%)		2023 Spending2023
Growth (%)
Data Center Systems34,46713.236,4335.7
Devices37,961-9.937,149-2.1
Internal Services52,933-2.255,1564.2
IT Services246,6985.2269,7359.3
Software153,26811.2174,01413.5
Telecom Services77,736-2.979,5992.4
Total603,0634.1652,0868.1
Source: Gartner (June 2023)

“To deal with the current economic climate, banking and investment services CIOs are now prioritizing more conservative objectives that support resilient and sustainable growth, such as a better customer experience (CX) and more efficient operations,” said Pete Redshaw, VP Analyst at Gartner. “This is a change from previous years when outright growth – new territories, new customers, new lines of business – was the primary objective of banking CEOs.”

Driven by the increased use of consulting services and infrastructure as a service (IaaS), IT services will be the largest spending category, forecast to reach almost $270 billion in 2023. This is an increase of 9.3% over 2022, reflecting the increasingly important role IT service providers play in helping banking and investment services organizations navigate emerging opportunities and challenges.

“Economic uncertainty is leading organizations to break down long-term contracts into multiple shorter projects,” said Buckland. “They’re also reluctant to sign new contracts, commit to long-term initiatives or take on new technology partners, which is driving an increase in the use of IT consulting services.”

With the global talent shortage impacting banking and investment services organizations, spending on internal services will increase by 4.2% in 2023 to support the increased costs of hiring and retaining talent.

“Even after the recent widespread redundancies at many of the technology giants, banks are no longer seen automatically by top talent as the most desirable, rewarding or stimulating destinations,” said Redshaw. “More innovative solutions are needed, such as dropping the requirement for university education and adding benefits such as lifetime retraining, hybrid teams, agile methods and fintech partnerships.”

Banking & financial services driving renewed growth in biometric hardware
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Global biometric device shipments fell from 4.1 million in 2019 to 3.4 million in 2021 and recovered slightly to 3.6 million in 2022, with global trends impacting usage in banking, financial services and insurance (BFSI) sectors.

According to a new report by technology intelligence firm ABI Research, geopolitical and macroeconomic events, including the conflict in Ukraine, the shortage in semiconductor supply, and downturns in supply chains, have resulted in turbulent market dynamics over the last few years.

It asserts that with a CAGR of 11.3%, fingerprint recognition will expand from 1.7 million to 2.9 million shipments in 2022 and 2027 to claim the lion’s share of the biometric modalities market.

“However, due to simplicity and the expanding use of liveness detection, facial recognition biometrics will experience the fastest growth over the same period, with a CAGR of 11.9%.” says Sam Gazeley, Digital Payment Technologies Analyst at ABI Research. “In terms of biometric hardware technology shipment share, ID/Authentication will account for 64% of the BFSI market in 2023. This is partly because, aside from smartphone-centric biometric technologies, user registration and authentication are the key use cases for biometrics in the BFSI sector.”

“Exacerbated by the increasing integration of biometrics in mobile banking apps and with more customers turning to mobile banking apps, several BFSI businesses are including biometric authentication methods like fingerprint and facial recognition in their solutions. While this applies predominantly to the smartphone industry, the BFSI market’s growing use of biometrics will encourage the deployment of biometric hardware in branches.

“The customer experience as it relates to the client authentication processes is being streamlined by deploying biometrics such as fingerprint and facial recognition, which improves the entire experience with BFSI services and combating fraud by eliminating the need for passwords.”

However, it is also important to remember that branchless banking is growing in popularity and will limit the accessible market for biometric hardware providers as we enter the forecast period, particularly regarding neo and challenger banks.

Top global payment companies generated $228bn in 2022
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The global payments industry witnessed an exceptional 2022, despite the challenges posed by expansionary monetary policy, geopolitical uncertainties, pandemic-related supply chain disruptions, and a macroeconomic environment with heightened inflation and increased energy costs.

That’s according to GlobalData, which says the top 20 public payment companies experienced a 15.5% increase in their top-line performance, reaching a total of $228 billion.

The US payment companies dominated the list with the top four – American Express, Visa, PayPal, and Mastercard – accounting for 58.5% of the aggregate revenue of the top 20. Driven by an increase in global payment volume, the big four grew by more than 10%.

Other companies in the top 20 list that recorded impressive top-line growth include Adyen, WAG Payment Solutions (Eurowag), WEX, and Fleetcor Technologies. Each grew by more than 20%. Eurowag and Nuvei are the new entrants replacing Lakala Payment and Evertec.

Murthy Grandhi, Company Profiles Analyst at GlobalData, said: “Adyen’s growth can be attributed to its remarkable progress of processed volumes that surpassed half a trillion, reaching EUR767.5 billion in 2022, reporting a year-on-year (YoY) growth rate of 49% and a CAGR of 48.2% over the past five years. Of these volumes, point-of-sale (POS) accounted for 15% translating to EUR115.1 billion. The company’s revenue expanded due to a greater increase in settlement and processing fees.”

Integrated payments and mobility platform player Eurowag’s 27.9% revenue growth was a result of higher energy prices and growing scale of payment solutions.

WEX reported robust revenue growth of 27% owing to 34.6% rise in payment processing revenue from Fleet solutions segment on the back of higher domestic fuel prices and volume growth in North American fleet and over-the-road businesses.

Fleetcor Technologies’ 20.9% growth in revenue was due to 14% rise in fleet revenue, driven by increase in transaction volumes and new sales growth and positive impact of the macroeconomic environment.

New entrant, Nuvei registered 16.4% rise in revenue primarily due to organic growth driven by higher e-commerce volume.

Samsung Card reported a dip in revenue triggered by a depreciation in currency value. Cielo’s 4.4% drop in revenue was due to the impact of the sale of MerchantE and M4U. Block (formerly Square) also reported a marginal drop in revenue owing to decline in the market price of bitcoin.

Grandhi concluded: “The recent disruptions in the economic, social, and technological landscape have created promising opportunities for businesses to explore and expand. These disruptions forced companies to explore new channels, enlarge customer reach, and seek new business prospects. In the near future, there can be spurt in niche areas such as social and live commerce, blockchain technology, real-time payments, open banking, adoption of digital currencies, biometric authentication for payment transactions, and the metaverse can emerge as a new commerce platform.”

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Secure your place at the Merchant Fraud Summit
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Registration is now open for a brand new event – the Merchant Fraud Summit, which is taking place on November 1st at the Hilton London Canary Wharf.

You asked, we listened: This event has been specially created following demand from our delegates who have previously attended the hugely popular event, Smarter Payments Summit. 

Your complimentary guest pass includes:

– An itinerary, designed by you, of pre-qualified one-to-one meetings with solution providers

– A seat at the industry seminar sessions

– Lunch and refreshments throughout

– Networking breaks to optimise your opportunity to make new connections

Areas covered at the event include: Anti-fraud software, Charge back protection, Data analysis, Digital identity verification, Fraud management, Risk prevention solutions, Security software and much more.

Click Here To Register

Delegates can contact Kerry Naumburger on 01992 374099 | k.naumburger@forumevents.co.uk to book your place or to find out more.

Alternatively, if you’re an industry supplier contact Jennie Lane on 01992 374 098 | j.lane@forumevents.co.uk.

Do you specialise in Fraud Detection Tools or Anti-Fraud Platforms? We want to hear from you!
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Each month on Merchant Fraud Briefing we’re shining the spotlight on a different part of the market – and in July we’ll be focussing on Fraud Detection Tools & Anti-Fraud Platforms.

It’s all part of our ‘Recommended’ editorial feature, designed to help industry buyers find the best products and services available today.

So, if you specialise in Fraud Detection Tools & Anti-Fraud Platforms and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Jennie Lane on 01992 374 098 | j.lane@forumevents.co.uk.

Here’s our 2023 Features List in full:-

July – Fraud Detection Tools & Anti-Fraud Platforms

August – Digital Identity Verification & Multifactor Authentication

September – Risk Prevention Solutions & Compliance Solutions

October – Mobile Fraud Prevention & AI for Fraud Prevention

November – Biometrics for Fraud Detection & IP Intelligence/Proxy Detection

December – POS Verification & Chargebacks

For more info, contact Jennie Lane on 01992 374 098 | j.lane@forumevents.co.uk.

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