Digital Payments have been growing in India at a much faster pace than global markets and thus, safeguarding payments for consumers, MSMEs, businesses is now the utmost priority. This imperative was highlighted by a study titled ‘Fraud & Risk Management in Digital Payments’ released by Data Security Council of India (DSCI) and PayPal India.
The report attempts to discuss the sophisticated online payment fraud mechanisms, threats in the payment ecosystem and incorporation of better fraud prevention strategies, role of upcoming technologies, and recommendations for various stakeholders involved in the payment ecosystem among others.
“The e-commerce market in India is expected to grow to $200 billion by 2026 from $50 billion in 2018. UPI transactions in India have crossed 149 crore in volume and $41 billion in transaction value, in July 2020,” the report said.
RBI predicts the number of digital transactions to increase from ₹2,069 crore in December 2018 to ₹8,707 crore by December, 2021. The Internet user base is expected to grow to 835 million by 2023 from 560 million in 2018. As of March 31, 2019, 925 million debit and 47 million credit cards have been issued in India, second only to China. As a result of the above momentum, the growth of online shoppers is 73% in tier-I cities whereas a staggering 400% in tier-II and tier-III cities, the report added.
The report covers various types of frauds scenarios such as buyer side, merchant side and cybersecurity frauds, and recent fraud case studies with their modus operandi. The key challenges to safeguard frauds remain fraud detection, investigation and legislative challenges, multilevel awareness, cross-industry collaboration, security as a cost overhead, privacy laws, and organized criminal involvement. Future fraud possibilities can shape up from exploitation of supply chain vulnerabilities, exploiting risk transfer controls and spoofing current fraud prevention mechanisms. Therefore, the report showcases how upcoming technologies like AI/ML, computer vision, NLP can come to the rescue. There is a significant focus on recommendations for various stakeholders involved in the payment ecosystem.
Rajesh Pant, National Cyber Security Coordinator, GoI, who released the report said, “Digitization and cyber security is at the core of Digital India’s mission and online payment safety is paramount for the country to emerge as a leader globally. The Government has taken many steps to support businesses, SMBs across their digital journey, however upcoming legislations and strategies will further aid the positive momentum. COVID has also provided an opportunity to fast-track both adoption and regulatory focus.’’