APP scams are a form of trust-based manipulation, deceiving individuals into willingly transferring funds to fraudsters
Authorized push payment (APP) scam losses are on the rise, with the UAE estimated to have seen a massive rise of 43 per cent to $8.3 million in APP scam losses in 2023, an industry report said.
Losses on account of such losses are expected to hit $30.3 million by 2028, according to the latest Scamscope report from ACI Worldwide-GlobalData.
ACI Worldwide is an innovator in global payments technology, while GlobalData is a leading data and analytics company.
With the scams in APP on the rise, losses are expected to climb to $7.6 billion by 2028 across six leading real-time payment markets such as the US, the UK, India, Brazil, Australia and the UAE, the report said.
APP scams are a form of trust-based manipulation, deceiving individuals into willingly transferring funds to fraudsters.
These transactions often appear legitimate and evade traditional fraud detection systems.
With the Middle East being the fastest-growing real-time payments market globally, one key finding in the report is the rise in real-time payment APP scams, as scammers are eager to exploit the immediacy of real-time transactions to steal funds before they can be traced.
“By 2028, APP scam losses through real-time payments in the UAE are expected to hit $26.8 million, accounting for almost 90 per cent of total scam losses,” the report said.
The report said though overall the UAE has the lowest APP scam losses among all the markets analysed, the country is witnessing a rise in sophisticated scams, particularly investment scams.
A significant 29 per cent of victims in the UAE fall prey to investment scams, and nearly one in five are victims of advance payment scams, the report revealed.
This situation is mirrored in other Middle East countries, most notably Saudi Arabia, it said.
As scams accelerate, one in five victims in the UAE choose to end their relationship with their existing financial institutions, underscoring the critical need for the country’s financial institutions to protect customers and maintain trust, the report said.
“The UAE government has demonstrated commendable vision in introducing its real-time payments platform, Aani, which offers incredible convenience to businesses and consumers.
“Real-time payment rails have the potential to be the most trusted and secure payment rails, but the proliferation of real-time payments and the concurrent rise of AI-driven financial crimes necessitate a paradigm shift in fraud strategies to stay ahead of evolving threats,” said Santhosh Rao, Senior Vice President, Sales – MEASA, ACI Worldwide.
The rise of APP scams in the UAE, driven by real-time payments and AI-powered fraud, also poses new challenges for financial institutions, consumers and regulators, he said.
Source: arabianbusiness.com
