Sabeer Nelliparamban, the Founder & CEO of Zil Money Corporation, Online Check Writer, and Tyler Petroleum Inc., highlighted the rise in sophisticated fraud rings and hacker alliances in the online payment landscape. As a result, merchants are estimated to lose approximately $343 billion between 2023 and 2027 due to payment fraud. Fraudsters are using advanced tools and techniques such as bots, synthetic identities, and exploiting emerging payment technologies to commit fraud. In response to this trend, Nelliparamban emphasized the importance of rethinking security strategies to stay ahead of the game.
Many industry leaders have suggested the formation of fraud data consortiums and anti-fraud networks comprising business organizations, financial institutions, payment platforms, and law enforcement to combat online payment fraud. By sharing information and insights about fraudulent activities, these collaborations enhance detection capabilities and present a unified front against fraudsters. Financial institutions and payment processors are already working together to combat fraud, sharing information to prevent fraudulent transactions and ensure legitimate transactions are not mistakenly blocked.
A fintech-focused fraud consortium in the U.S. has shown positive outcomes by collaborating with others in combating online payment fraud. Some benefits of these collaborations include improved fraud detection accuracy, reduced fraud attack rates, and increased difficulty for cybercriminals to target businesses within the consortium. Nelliparamban outlined a blueprint for forming an anti-fraud network involving various key participants such as financial institutions, payment processors, e-commerce platforms, regulatory authorities, fraud detection experts, and law enforcement agencies. The network’s functionality includes real-time data sharing, AI and analytics, preventive measures, and continuous communication to achieve desired outcomes like reduced fraud rates, improved fraud detection, and faster response times.
Challenges in forming an anti-fraud network include building trust among network members, balancing information sharing with data privacy, and establishing standardization for seamless communication. Being part of such a network can be beneficial for organizations looking to attract new clients, offering a safe payment experience, strengthening against possible attacks, and promoting client trust and loyalty. Members can also benefit from access to sophisticated analytics and fraud detection tools, as well as sharing information and best practices with other members to improve the overall health of the online payment ecosystem.
