Fraud in the payments arena has been with us forever. Artifices such as the debasement of gold coins by adding less precious metals, the printing of counterfeit banknotes, the manufacturing of bogus payment cards, are all examples of deception.
And fraudsters have evolved just as quickly as have the different payment options – sometimes quicker. Indeed, they could be seen as the epitome of a successful business model with a strategy team, market researchers, operations experts and a flexible workforce.
In an era of organisational realignment and speed of pivot, it could be argued the fraudster business has a lot to teach management gurus. They were agile and fast to market with minimal viable products before these became fixtures of modern management.
Nowhere is this better exemplified than in the move to exploit digital payments and e-commerce, both of which have been turbo-charged by the COVID-19 pandemic. Between using the pandemic and bushfires earlier in 2020 to their advatange, scammers cost Australians $A77 million in the first six months of 2020. Business email compromise (BEC) scams, in which scammers impersonate a supplier or senior staff through email and requests money be sent to a fraudulent account, took in more than $A132 million in 2019.
With virus concerns, the attraction of contactless cards and digital wallets has seen the use of cash as a payment mechanism dramatically decline while e-commerce has become more of the norm in many retail environments where previously consumers had been physically involved. In April 2020, 5.2 million Australians shopped online, spending $A2.7 billion, which was over 11 per cent of total retail sales, more than double a year earlier.