Frauds in Payment System

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Industry Perspective

1 decision makers from the banking, payments, legal, regulatory and merchant communities
2 payments system security threats and how those threats might best be addressed.
3 Payments Technology and Innovation
4 Responsibility and Incentives for Fraud Prevention


An overview of payments fraud


-Payments fraud can be broadly defined as any activity that uses information from any type of payments transaction for unlawful gain

-all types of payments fraud, fraud perpetrated by criminals has received special attention of late.1

-Fraud is a very real threat to the payments system’s efficiency

-As more payments become electronic, the size and scope of payments fraud has grown, in part because the relevant parties in a payments transaction do not know one another.


Why worry about payments fraud?


-Fraud degrades operational performance and increases cost, not only for the parties to the transactions whose payments are disrupted, but also for the payments system as a whole.

-Indeed, payments networks are vulnerable to fraud at any point in a payments chain, and fraudsters often attempt to exploit the weakest page link in that chain.

-An independent consultant, it is possible for a single data breach to affect multiple layers in the payments system and disrupt the efficient operation of the entire system if confidence in the system is lost.