According to G2 Web Services – a merchant risk intelligence solution provider for acquirers, commercial banks and their value chain partners – cybercriminals are increasingly turning to alternative
paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More methods (APMs) to conduct illegal activities. APMs include peer-to-peer payments,
moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More service businesses, e-wallets, mobile payments, prepaid cards, vouchers, bank debits, credits or linked bank accounts and cryptocurrencies.
Thanks to increased credit card security, fraudsters are moving towards these new payment methods that are subject to less scrutiny and which might contain exploitable loopholes. Dan Frechtling, CMO at G2 Web Services, explains that weaknesses are frequently found in newcomers’ systems who prefer to focus on their expansion plan, underestimating the importance of protecting their network.
G2 Web Services’ investigation demonstrated that crooks take advantage of alternative payments to conduct mainly three types of activities: payment hustling, sequential digital wallets and local law arbitrage. The payment hustle is when a fraudster moves to a new payment type after he/she was shut down on a first
payment instrumentDevice, tool, procedure or system used to make a transaction or settle a debt. More, usually a credit card. Sequential digital wallets are created to hide illegal activities behind a registered e-wallet linked to a bank account. There are two wallets. This first one is a named account that feeds a second, anonymous account. This system enables criminals to conduct transactions that cannot be tracked back to the first wallet. The last activity, called local law arbitrage, is when consumers use the mobile wallet of another country to buy goods that are illegal in their respective countries.
Frechtling affirms that it is the responsibility of financial institutions and APM providers to adopt know your customer’s customer (KYCC) procedures to prevent frauds and money-laundering.