New threats emerge as the digital payment infrastructure changes: As digital payments come to dominate our financial landscape, it’s becoming more important than ever to protect our payments and digital financial footprint — particularly when businesses’ bottom lines are at risk. Visa Payment Fraud Disruption’s (PFD) most recent Biannual Threats Report (pdf) takes a deep dive into how threat actors tried to target your business and your wallet in 1H 2024, with an eye on the increasingly sophisticated and targeted tactics being used in today’s digital age.

WHY IT MATTERS-

A growing number of banked citizens provides more possible inroads for payments attacks: Egypt has been making serious strides in financial inclusion in recent years, with the Central Bank of Egypt announcing earlier this year that some 48.1 mn Egyptians were banked as of June 2024. This brings the number of banked citizens — whether via bank, Egypt Post accounts, mobile wallets, or prepaid cards — to around 71.5% of eligible citizens, according to the CBE, with financial inclusion in June up 181% since 2016.

Our large proportion of fintech startups is also a relevant part of the discussion, with a number of firms like Fawry, MNT-Halan, Dopay, Paysky, Paymob, OPay, Valu, Thndr, Contact Financial, Aman Holding, Masria Digital Payments, Money Fellows, and many others operating in and adjacent to the digital payments space.

There’s even more in the pipeline on the digital payments front, too: Visa is working withthe Central Bank of Egypt on operational trials for payment card tokenization on mobile applications, allowing contactless payments via these apps. The company is also working with the CBE on new regulations to develop digital payments in foreign trade transactions.

TL;DR: Digital payments safety is critical for safeguarding consumers and businesses alike, particularly as attackers come to exploit new areas of opportunity in the region and rapidly disseminating technologies, including AI.

THE TRENDS-

The first half of the year saw a big jump in fraudulent payment authorization cases: Visa PFD opened 81% more purchase return authorization cases during 1H 2024 compared to the preceding six-month period, with each successful attack resulting in potential losses of around USD 184k for the credit card company’s issuing partners, the report writes.

Third-party service providers and retailers’ digital wallets are two points of attack for fraudsters: While ransomware and data breach incidents were down 12.3% from the previous half in 1H 2024, attackers continue to target third-party service providers, with Visa PFD noting a 24% uptick in third-party service investigations during the first half of this year. Scammers have also begun targeting retailers’ digital wallets and using mobile point-of-sale devices to tap wallets and activate cards for a transaction.

Ecommerce saw an uptick in skimming attacks: Ecommerce providers are increasingly being targeted by skimming attacks, in which threat actors target merchant websites with malicious code in order to gain access to payment data. While overall skimming has largely remained steady in 1H 2024, the report notes that fraud perpetrators are focusing their efforts on ecommerce merchants “as they are more likely to have direct access to sensitive payment account data stored within cardholder data environments or provided via the victims’ checkout webpages.”

Our region made up a much higher proportion of attacks at the gas pump: Automated fuel dispenser fraud — attacks targeting payments made while fueling up your vehicle — declined 19% compared to the previous half but increased 373% in terms of total value of fraud. The Central Europe, Middle East, and Africa (CEMEA) region fielded a growing proportion of these attacks, with issuers in the region making up 47% of all attacks in 1H 2024 compared to 4% in 2H 2023.

Summer is the high season for fraud: With its sporting events, concerts, and festivals, summer is an ideal time for scammers to take advantage of online ticket purchases as you fill up your busy social calendar. Summer travel is another weak link, with a number of scams imitating major airlines and cheating you out of expensive airfares.

AI is increasingly being used to perpetrate attacks, with the report noting more and more sophisticated attacks using the advanced technology. For instance, earlier this year an employee of a company in Hong Kong wired USD 25.6 mn to a number of bank accounts on the directions of his CFO — who actually turned out to be an AI-generated deepfake created by scammers, the report reads. AI is also being used for reconnaissance on individuals via data scraping, which helps threat actors construct more believable scams.

But don’t you fret, analog theft isn’t dead: Physical theft of payment cards and phones has only increased in recent months, with the report noting a marked increase in longstanding ATM scams, mail theft, vehicle break-ins, and pickpocketing as thieves increasingly target consumers. “The recent increase in physical theft reflects a broader trend wherein actors are encountering more friction in conducting fraud due to increased secure acceptance and fraud controls,” the report reads.

The situation may sound dire, but Visa’s fraud department is on the case: Major payment ecosystems players have a wealth of resources deployed toward monitoring and taking out threats to digital payments, many with great success. As a case in point, during the first six months of 2024, Visa’s Risk Operations Center “implemented pre-emptive, targeted blocks in coordination with impacted organizations,” resulting in over 51.8 mn declined transactions worth a total of USD 11.8 bn.

Your top infrastructure stories for the week:

  • SCZone signed a land usufruct agreement with Orascom Construction subsidiary Orascom Industrial Parks for its EGP 13 bn integrated industrial complex planned for the Sokhna Industrial Zone.
  • Turkish investment group Erciyas Holding is looking to set up a USD 60 mn oil, natural gas, and water pipelines factory, which is expected to generate USD 200 mn in revenues and will export 60% of its production.
  • Turkish clothing manufacturer Eroglu Holding began work in its USD 51 mnfactory in the Qantara West Industrial Zone. Spanning 84.2 sqm, the factory is expected to create some 5k jobs when operational.
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