As consumers turn increasingly to alternative online payment methods like digital wallets, crypto and Buy Now, Pay Later, fraudsters are targeting the companies that provide those services to merchants more often, according to a new report.
In its Q1 Digital Trust & Safety Index, antifraud technology provider Sift said the fraud attack rate on fintech companies rose 70 percent in 2021 compared to 2020. Part of the reason is the growth those payment methods are currently experiencing. Fintech companies on Sift’s network saw transaction volumes grow by 121 percent year-over-year.
According to the report, fraud attacks on digital wallets were 200 percent higher in 2021 than the year before. Cryptocurrency exchanges were targeted 140 percent more and BNPL providers saw their fraud attack rates climb 54 percent.
“In late 2021, Sift’s Trust and Safety Architects discovered a growing number of fraud schemes on Telegram offering unlimited access to BNPL accounts through fake credit card numbers and compromised email addresses,” Sift wrote in a statement. “[It showcased] the array of methods actors in the Fraud Economy are using to target the entire fintech sector.”