New research reveals impact of APP fraud

APP fraud (Authorized Push Payment ) losses are on the rise and expected to climb to $6.8 billion — a combined compound annual growth rate (CAGR) of 11% — by 2027 across six leading real-time payment markets (US, UK, India, Brazil, Australia and Saudi Arabia) according to Scamscope.

During the same period, the overall value of real-time transactions is also forecasted to grow at a faster pace, reaching 25% CAGR.

APP fraud is now so rife across the UK, 1 in 3 consumers have fallen victim and over half (53%) say it’s getting harder to spot the signs.

New research from Visa reveals the negative impact of authorised push payment (APP) fraud on UK consumers beyond the financial loss.

APP fraud occurs when someone is tricked into transferring money to a fraudster posing as a genuine payee.

Total losses due to APP scams in the UK exceeded £239 million in H1 2023 according to UK Finance.

Visa’s latest whitepaper, The Impact of APP Scams, explores the victim experience and demonstrates the impact APP fraud can have on money management, financial confidence, and personal wellbeing.

The research found that whilst nearly three fifths of UK consumers (58%) are confident in managing their finances, falling victim to an APP scam can change money management habits.

Almost a fifth (19%) of those surveyed that have fallen victim to an APP scam say that the scam has decreased their confidence in digital banking, and more than a third (35%) say it had a negative impact on their openness to paying new payees.

In addition, 1 in 3 of those surveyed reported that their mental health suffered as a result of APP fraud, and almost half (45%) feel at risk of falling for the scam again.

Visa is calling for cross-industry collaboration to fight fraud, with an increased focus on prevention measures – stopping the money leaving victims’ bank accounts and ending up in the hands of criminals.

“Falling victim to a scam can be incredibly distressing. Our research shows that even with all the security measures introduced by banks, fraud can have a devastating impact on people’s ability to manage their finances, even when they get their money back,” says Mandy Lamb, managing director, UK & Ireland.

“Once fraud happens, the money is in the hands of the criminals, and both consumers and the economy are penalised with loss of savings, income and taxes.

Fraud prevention must be our collective goal and cross-industry collaboration to stop fraud at the source will be crucial to achieving this.”