Losses from authorised push payment (APP) scams in six payments markets are expected to climb to $7.6 billion by 2028, according to new research by ACI Worldwide, although the UK is the only one of the six countries to have reported a year-over-year decline in APP fraud loss values from 2022-23.
The findings have been revealed in the latest ScamScope report published by ACI Worldwide in partnership with GlobalData, which covers the US, UK, India, Brazil, Australia and the UAE.
The report forecasts that APP scam losses through real-time payments will see a combined 2023-28 compound annual growth rate (CAGR) of 17% versus 12% CAGR for total APP scam losses worldwide over the same period.
Real-time payment APP scam losses are expected to grow to $6.1 billion by 2028, comprising 80% of total APP scam values.
The 2024 Scamscope report revealed “an erosion of trust” among consumers who fall victim to scams, after it found that 25% of scam victims will leave their current financial institution, and around 20% close their accounts without opening new ones.
On a country-by-country basis, the second-largest real-time payments market globally, Brazil, is projected to experience the highest growth in APP scam losses compared to other markets analysed in the report.
The ScamScope report revealed that APP scam losses in Brazil hit almost $380 million in 2023 and are projected to increase by almost 40% by 2028.
The UAE had the lowest APP scam losses, at $8.3 million, among analysed markets in 2023, although real-time payment APP scam losses are expected to hit $26.8 million by 2028 as real-time payments pick up momentum in the UAE.
The UK is the only country in this year’s report with a year-over-year decrease in APP fraud loss values from 2022-23 of 5%.
According to the report, while there has been a notable increase in APP fraud cases, there has been a slight decrease in overall financial losses, indicating more effective fraud prevention measures and lower losses per case.
Meanwhile, the US reported more than $2 billion in APP scam losses in 2023, with real-time payment APP scams’ projected 2023-28 CAGR at 19%, far outpacing the total APP scam 2023-28 CAGR of 7.4%.
“Integrating AI in financial services is a double-edged sword, both in enabling sophisticated financial crimes and fortifying defenses against them.
“Scammers are using AI to boost inherited trust to unprecedented levels, automating hits and driving more effective social engineering techniques,” said Cleber Martins, head of payments intelligence and risk solutions at ACI Worldwide.
The report highlighted the progress made by Australia in addressing this issue with strategic initiatives such as Scamwatch and improved collaboration among industry stakeholders, leading to a projected growth slowdown in APP scam losses over the next five years.
Martins called on a “coordinated cross-industry defense to share precise and collective intelligence in real time” in response to the rise of real-time payment APP scams.
“By breaking down silos and fostering cross-border collaboration, mule networks can be dismantled to better protect consumers,” he added.
Further reading: UK Finance collaborates with mobile networks to tackle APP fraud
