Digital wallet abuse is on the rise as criminal networks continue to exploit individuals and businesses for their own selfish gains.
In 2024, over 2.5 million cases of remote purchase fraud were recorded, so it is important that you can spot signs of digital wallet fraud and put measures in place to protect yourself, your business and your customers.
How do criminal networks exploit digital wallets?
Criminals will steal card details and add them to apps like Apple Pay and Google Pay without the cardholder’s knowledge.
From there, they can bypass the standard banking checks and complete purchases and cash-outs.
They will look to exploit the verification process that links a card to the digital wallet, as many banks and apps will ask for a One-Time Passcode (OTP). Their objective is to try and obtain that OTP.
They will use methods, such as phishing, malicious online adverts, social media content and social engineering, to manipulate unsuspecting victims into providing OTPs.
Once they have the information required, they will begin to take advantage of and use the funds and details they have gained illicitly.
What can be done to reduce the risk of digital wallet fraud?
One of the best approaches to reduce the risk of digital wallet fraud is not receiving an OTP via SMS.
Criminals see SMS as a golden opportunity to obtain the information they need through social engineering and SIM swapping.
However, if this option is removed, the risks of digital wallet abuse reduce drastically, with many banks reporting very few digital wallet cases.
If your business, firm or your clients are using SMS based OTPs, you should consider removing this to protect your data.
Other ways you can reduce the risk are to educate yourself and your clients on exactly what digital wallet abuse is.
