Top payment security trends in Asia Pacific

The Asia Pacific region is rapidly emerging as a digital payments powerhouse. New research indicates that the region could see 1.03 trillion transactions by 2025, up 109 percent from 494 billion transactions in 2020.

What’s underpinning this shift? Soaring digital adoption accelerated by the pandemic, for a start, along with customer expectations of fast, convenient payment services. However, there are also risks: the region’s increasingly digital payments landscape is enabling new opportunities for online scammers. Studies show that in 2022, the cost of payment fraud rose to 16 percent across the region – up from 10 percent from pre-pandemic levels in 2019.

Staying ahead of the curve is a challenge for everyone, especially as we’re seeing fraudsters evolve their methods faster than consumers and most businesses can prepare for. So, what are the fresh payment security threats that Asia Pacific businesses need to know about – and how best can they enhance their fraud controls in response?

1. Phishing scams are growing more sophisticated

As artificial intelligence (AI) advances, systems built on large language models such as generative AI (gen AI) are getting much better at emulating human-like responses. Unfortunately, that can also be a boon to fraudsters seeking to make phishing campaigns more convincing. Gen AI is making fraudulent emails or phishing text messages appear more plausible by perfecting the language and making it harder to spot the fakes.

In Asia Pacific, this added sophistication in scam approaches is helping cybercriminals exploit even tech-savvy consumers, as new Visa research reveals. While nearly half of the consumers we surveyed across 14 Asia Pacific markets are confident they can spot a scam, nearly 75 percent are likely to miss red flags – suspicious hyperlinks, for example, along with wonky formatting or missing contact information.

Payment providers have to continually buttress fraud management solutions with enhanced approaches. And it is having an effect – over a 12-month period ending November 2022, Visa blocked US$7.2 billion worth of attempted fraudulent payments across 122 million global transactions, stopping fraudsters in their tracks¹.

2. Fraudsters are working harder to impersonate customers

Fraudsters and cybercriminals spend a lot of time impersonating consumers so they can steal their payment credentials, make purchases and exploit businesses. In Singapore, for example, hackers posing as bank customers recently used stolen credit card details to make about S$500,000 in fraudulent online payments in a matter of weeks.

One way Visa is responding is by beefing up our risk-based authentication (RBA) models. RBA uses scores to determine whether someone can perform an action such as make an online card payment or log into an account. As well as helping to catch bad agents, RBA can remove friction from transactions and customer interactions by eliminating the need for verification steps such as two-factor authentication.

Our Visa Advanced Authorisation solution is a case in point. With every transaction, it analyses over 500 connected data elements before generating a risk score – enabling businesses to better identify potential fraud before it occurs while also delivering a smoother checkout process.

3. AI-powered fraud solutions are combatting weaponised AI

The fraud landscape may be evolving, but the same technological tools making fraud more pervasive in banking and payments are also enabling organisations to meet the challenge. For example, by synthesising massive volumes of data, AI systems can rapidly identify threat anomalies and significantly enhance existing fraud detection processes.

Over the past five years, Visa has invested US$9 billion globally to boost cybersecurity and combat fraud with innovative machine learning and AI-powered solutions. We also launched our Visa Token Service (VTS) back in 2014 to enable safer online transactions in an era where consumer’s spending preferences have shifted to digital.

Tokenisation is a security technology that replaces sensitive account information such as a card number with a unique digital identifier known as a token. Because this identifier allows payments to be processed without exposing actual account information, it benefits the entire payment ecosystem – from issuers to acquirers, merchants and consumers. Globally, VTS has experienced rapid growth, surpassing 5 billion tokens in February 2023 and also contributing to a 28 percent reduction in fraud rates.

4.  Investing in security and safety across all types of payments

Customers today expect quick and seamless transactions. They want to initiate real-time payments whenever and wherever they choose, with immediate confirmation that the payment is complete, be it domestically or cross-border. Small wonder that in Asia Pacific alone, transaction volumes are expected to grow from 49.2 billion in 2022 to 96.2 billion by 2027, a compound annual growth rate of 14 percent. Enabling this growth is the rise of national real-time payment (RTP) domestic networks.

However, this fast-evolving payments landscape is also very fragmented – especially in Asia Pacific. The staggering volume of payment transactions that take place daily, moving from one payment network to another, brings a heightened vulnerability to fraud. This is in sharp contrast to those transactions that are processed entirely on the Visa network, where they get end-to-end protection. It’s why at Visa, we’re harnessing the expertise of our global team of over 1,000 cybersecurity specialists to combat this challenge, aided by AI and Machine Learning to identify patterns and enumeration techniques that would otherwise go unnoticed.

The work doesn’t end there. While regulators and central banks in Asia Pacific are collaborating to bring about payment integration and interoperability, Visa continues to invest in new technologies and platforms to support seamless cross-border payments that can add to the robustness and resilience of the overall payments ecosystem.

A smarter, safer payments ecosystem for all

As Asia Pacific continues to witness a surge in digital payments, security is crucial for consumer trust and a foundational issue for businesses everywhere. At Visa, we’re doubling down on our commitment to innovation and security, with a mandate to improve customer experience and boost consumer and business confidence through fraud mitigation and security.

Learn more here about how Visa Security protects payments.

 

¹ For the period of November 2021 - November 2022