The growing interconnectedness of digital systems, combined with the alarming ingenuity of financial criminals, has led to a convergence between payment fraud, cybercrime, and AML. As financial transactions increasingly occur online, and real-time payments have expanded to over seventy countries, cybercriminals exploit these trends by developing sophisticated schemes to target vulnerabilities in digital payment systems. As a result, payment fraud has become more prevalent and more challenging to detect. A profusion of new tools available on the Dark Web makes it easier than ever for cybercriminals to steal millions through a combination of social engineering, malware, cyberattacks, identity theft, stolen credentials, and mule accounts. These attacks expand vectors beyond traditional payment fraud methods, including cybersecurity breaches and money laundering techniques. For example, a typical attack may include: The theft of a bank employee’s credentials. Malware is installed on the bank’s network. Funds are routed from the bank’s account to a [...]

The US Federal Reserve launched the FedNow real-time payment service in July, creating a centralised system it hopes will enable faster cash flow for individuals and businesses in the US. As exciting as the launch of this frictionless new payment rail is, fraudsters will find new ways to exploit merchants and customers. Authorised push payment fraud, already a major problem for services like Zelle, is likely to flourish. Banks will need to be proactive to stay a step ahead of criminals. Real-time payments have ushered in a new age of convenience for consumers, allowing them to make and receive instant or near-instant payments with low transaction costs. But along with the speed and ease of transacting, real-time payments also expose consumers to an elevated risk of authorised push payment (APP) fraud. Losses to this form of fraud are expected to top $5.25 billion by 2026 across the UK, India, and [...]

The B2C consumer payments sector has experienced profound disruption over the past five years as fintechs, neobanks and bigtech companies have come to market with innovative digital value propositions. Apple and Google are today synonymous with digital wallets, while the brands of traditional issuers and payments networks have become somewhat sidelined. But disruption of the payments sector is just beginning. As much as consumers gravitate towards Apple Pay and Google Pay as their preferred way of paying, these digital wallets still run on traditional card rails. Banks and the payments networks have lost some brand salience, but consumers still generally need their cards to make a payment from these wallets. This picture could change fast as real-time, account-to-account payments make it easier for consumers to pay each other and merchants without a card. Real-time payments (RTP) schemes such as Brazil’s Pix, India’s UPI, South Africa’s PayShap and the US’s FedNow [...]

The need for organisations to protect themselves against quantum threats to cybersecurity is becoming increasingly important as quantum-computing technology advances. Quantum computers have the potential to break many of the encryption techniques currently used to secure data, and this poses a significant risk to organisations in the payments industry. Understanding Quantum Threats in the Payments Industry While quantum computers are still in the early stages of development in terms of both hardware and software, it is anticipated that if development continues at its current pace, it will be a real threat to organisations five to ten years from now. While this may seem a long way off, the vulnerability of today’s payment infrastructure is greatly exposed to quantum supremacy, and it is imperative that financial institutions take steps now to protect themselves and their customers. “While ten years might seem very far in the future,” says Costas Valakas, Stanchion’s Senior [...]

Over the past few years, the evolution of standards such as 3D Secure 2 (3DS2) and regulations such as the Strong Customer Authentication requirements in Europe’s Payment Services Directive 2 has helped to contain the growth of card-not-present (CNP) fraud. Yet with online transactions growing at a rapid rate, the payments sector can’t afford to be complacent. According to the Nilson Report, payment card fraud losses worldwide exceeded $32 billion in 2021, with the industry projected to lose an accumulated $397 billion worldwide over the next 10 years. Continued growth in CNP losses as transactions on apps and websites rise is one of the factors fuelling the growth in payments fraud losses, according to Nilson. In addition to the financial and reputational impact of fraud on merchants and issuers, there are also the cost associated with high levels of false declines. Declining a legitimate transaction not only costs the merchant [...]

In today’s rapidly evolving digital landscape, retailers and organisations are continually having to embrace and implement innovative payment changes to streamline payment processes and improve the overall customer experience. An important consideration in this regard for retailers who own their own payment switch is moving it to the cloud, a complex but necessary upgrade and safeguard that requires industry expertise and experience to deliver the programme without introducing extra operational risks. As a leading global PayTech solution provider, Stanchion has more than 20 years’ experience solving complex payment problems for clients around the world. Currently, Stanchion is engaging with the largest payment switch vendor on a strategic European project, which entails migrating a large on-premise infrastructure to cloud. The project’s scope involves moving an existing multi-tenant payment switch to a well-known Cloud provider with Stanchion providing a solution architect to design the solution and provide support during the implementation and [...]

Today’s consumers are smartphone-obsessed – and the more time they spend on their devices, the more these devices impact their behaviour and the way they consume. These devices are now so much more than just a means for communication, they have become a tool to simplify and enhance every aspect of consumers’ lives, particularly the way they handle their money and make payments. To retain and gain customers, banks and financial institutions need to ensure that they are keeping up with the pace of change and that they provide their customers with seamless digital experiences. One way they can do this is by leveraging digital wallets to improve customers’ journey and meet their demand for frictionless, cashless and cardless payment options. The growth in cashless payments has been rapid and shows no sign of slowing down: PwC and Strategy forecast that between 2020 and 2025 global cashless payment volumes will [...]

Over the past three years, we’ve seen payments innovation move at a blistering pace. Accelerated digitalisation during the pandemic boosted the adoption of digital and contactless payments around the globe. But we’re just at the start of a shift in payments that will ultimately give consumers the ability to pay anywhere, anytime and anyhow. Though it’s too early to say that cash is an endangered species, the stage is set for even more rapid adoption of new payments choices over the next decade. PwC and Strategy forecast that global cashless payment volumes will increase by more than 80% from 2020 to 2025 from 1 trillion transactions to almost 1.9 trillion and almost triple that by 2030. We had the rapid adoption of digital wallets, NFC and QR code payments during lockdowns, but that was just the beginning. Alternative payment methods such as cryptocurrency, QR code-based wallets and account to account [...]