This transition has made payments more seamless and integrated into the customer experience, resulting in an immersive and frictionless payment process that is both embedded and visible to customers.
Countries in Africa, in particular, have seen a remarkable evolution in digital payments over the last decade. The massification of mobile technology and the increase in internet connectivity have been vital in fighting against financial exclusion.
Digital payments have revolutionized the African market, transforming it into a dynamic industry. The advent of digital payments has made a significant impact by enabling safe, fast, and convenient transactions.
With the rise of mobile money and other digital payment solutions, individuals, businesses, and governments can now transact quickly and efficiently, driving growth and development across the continent.
However, the digital payments sector has become a key target for fraudsters. Companies within the payment industry are facing various fraud attempts and three big challenges.
The latest payment industry fraudulent tactics
- Phishing: In Nigeria, approximately 7% of computers have fallen prey to phishing tactics, exposing millions of people and computers to cyber threats. According to Kaspersky, this number has doubled since 2021, highlighting the growing need for increased awareness and protection against phishing attacks.
- Card fraud: In South Africa, criminals have been known to install external devices on ATMs in heavily trafficked touristic areas to obtain unsuspecting victims’ credit or debit card information. Globally, card fraud resulted in losses of $7.85 billion in 2020 alone, with Africa experiencing an average year-over-year increase of 54%.
- Identity fraud and theft: AI has enabled criminals to manipulate and forge documentation or steal other people’s IDs to gain access to the payment industry. This type of fraud attempt has nearly doubled since the onset of the COVID-19 pandemic, with the US alone reporting 1.3 million cases in 2020.
Keep reading: The Impact of PEP Regulations on Businesses in Nigeria.
Top three security challenges the payment industry will be facing in 2024
- Enhanced Identity Verification Technology: AI and machine learning in e-KYC have made it easier to onboard previously unbanked individuals who traditional systems might have overlooked. Improving identity verification technology during the onboarding process can enable access to more users while maintaining compliance with AML and KYC regulations.
- Regulatory Compliance: With the growth of digital payments, regulatory bodies are likely to impose stricter regulations to ensure data privacy and security. Digital payment providers must stay up-to-date with regulatory requirements and implement robust KYC and AML compliance programs to meet these standards and avoid heavy fines and reputational damage.
- The sophistication of Cyberattacks: As digital payments become more popular, cybercriminals will develop new and more sophisticated techniques to steal sensitive information. To address this issue, digital payment providers must invest in advanced security measures such as multifactor authentication, encryption, and real-time fraud detection.
Partnering with industry-leading experts like MetaMap can enhance your security posture, protect your business from potential threats, and overcome future challenges.
Keep reading: The Impact of New AML Regulations on The Banking Industry.
MetaMap: Compliance, onboarding, and fraud Prevention, all in one AI-powered platform
MetaMap is a customer identity platform with experience working with well-known companies in Africa’s banking, financial, and payments sectors.
We assist our clients in implementing advanced compliance and security solutions powered by AI to enhance their internal processes, improve efficiency, and boost new user conversion rates.
Our cutting-edge AI-driven tools leverage advanced capabilities such as biometric data collection and analysis, regular transaction monitoring, and over 25 other features to empower companies to automatically detect and prevent fraud, significantly reducing inherent risk for banking and credit businesses.
In addition to offering a personalized solution, our platform also focuses on improving the user experience through innovative onboarding tools. Our clients can rely on a fast and secure onboarding process by collecting and comparing data from 1,200+ PEP and AML watchlists, government data, and the automatic processing and validation of identity documents.
Try MetaMap‘s AI-powered customer identity platform today and get 300 free verifications. Sign up now and stay ahead of regulatory requirements while protecting your business from potential risks.
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