Fin-Tech company start-up’s in Africa are leading the world with the bulk of new VC funding going to this sector over the past year. It indicates how important money transactions are across the continent and how rapidly the number of players in the market are developing. The realm of digital payment technologies has undergone a profound reshaping, redefining how individuals engage with their finances and payments world-wide. With all this rapid innovation however, comes challenges, including fraud and cyber security risks which currently plague the local landscape. This is validated by Visa’s latest Stay Secure research, which sheds light on the escalating sophistication of scams in the digital landscape, and unveils a concerning gap between consumer confidence in recognising fraud and online criminal activities.
The research, undertaken across 17 countries revealed a disconnect between consumers’ confidence in recognizing fraud and their online behavior, highlighting the importance of staying alert and mindful of fraud attempts. Despite more than half of consumers (56%) claiming to be savvy enough to sidestep online and phone scams, 90% are likely to disregard the warning signs that suggest online criminal activity.
Headline Causes of Scams Being Successful:
- ‘Costly confidence’ revealed as 56% of consumers claim to be scam-savvy, but 9 in 10 are likely to miss common fraud warning signs.
- 87% Are likely to ignore Warnings of scams
- Over half (52%) of consumers are concerned that friends or family will fall for a scam, with 71% likely to respond to a positive message from fraudsters.
According to the Study, confidence in the ability to spot a scam, and the vulnerability it may bring, is highest in countries like Qatar (69%), Kenya (65%), South Africa (65%), Saudi Arabia (64%), and Nigeria (63%). The Study also found that most adults in Kenya (74%), Nigeria (72%), and South Africa (64%) report having been the victim of a scam or fraud. However, those in Tunisia (43%) and Morocco (33%) are the least likely to report this.
Key Findings of the Visa Stay Secure Study:
- The knowledge gap. Considering themselves knowledgeable might make people even more vulnerable, as false confidence can propel someone to click on a fake link or respond to a scam offer.
- Concern for the vulnerability of others. While respondents feel confident in their own vigilance, over half (52%) are concerned that their friends or families will fall for a scam email offering a free gift card or product from an online shopping site. Over a third (36%) of respondents are concerned about children or minors, as well as retired people falling prey to online scams.
- What makes people suspicious. In addition to notices involving orders, product offers, or feedback, people are most suspicious of password requests. Less suspicious types of communications are updates regarding delivery or shipping (just 42% listed as a top three source of suspicion), marketing communications regarding a sale or new product offering (41%), or an invitation to provide feedback on a recent experience (37%) – all of which can be used by scammers.
- Overlooking telltale signs. Only 57% reported looking to ensure communications are sent from a valid email address, while 52% will check if the company name or logo was attached to the message. Fewer than half of correspondents look for an order number (45%) or an account number (43%). Only 33% look to ensure words are spelt correctly.
According to Charles Lobo, Senior Vice President & Regional Risk Officer for VISA, they have seen $40 billion in fraudulent transactions prevented in the last year alone. The total number of transactions involved were over 800 million. To put that into perspective, VISA process 76 000 transactions per second and have $276 Billion in transactional value each year.
Lobo points out that the 5 top payment risk trends are:
- People – Multiple layers of risk with customers not taking precautions and lack of awareness as to what could be fake
- New Cyber-attacks happening at an ever increasing rate – over 67% growth in the past year
- Deep Fakes with Ai Assistance cloning voice and facial recognition & providing biometric bypasses
- Growth of the Gen-Z generation who are more inclined to take things on social media at face value, with 90% likely to click on a link that is fraudulent
- Eco-system integrity with such rapid growth in payment facilitators – over 50% growth in registered payment facilitators over the past year, and over 90% growth in online illegal gambling where entire IT structures are at risk due to poor security protocols and easily hacked by fraudsters.
VISA has developed a range of anti-fraud services including a large amount of fraud related data that clients are able to utilize to identify threats. They utilize real-time data driven risk reporting 24/7 with 1000 staff working permanently on identifying security risks. They have also developed Their VRM and VAA scheme agnostic pilot with EVS Technology that works across multiple systems.
In addition, they have developed a new scanning system that can be utilized to detect sophisticated malware that is widely being used to skim login details without being detected. Their software can identify these risks and VISA are able to assist clients to remove the threats.
VISA have taken the position that in order to mitigate risks there needs to be widespread knowledge provided and importantly there needs to be constant upskilling of staff involved in financial transactions and payment systems.
