How Does Push Payment Fraud Work? Common Tactics Used by Scammers
Forget the Hollywood image of a hooded hacker furiously typing code in a dark room to bypass a login challenge.
A fraudster who carries out a push payment scam is less like a computer wizard and more like a master psychologist. These scams rely entirely on social engineering. In other words, the dark art of convincing a rational person to do something irrational.
In this chapter, I’ll give you a look at how push payment fraudsters use fear, urgency, or even romance to defeat the biggest vulnerability of them all: the human behind the device.
How does push payment fraud work and what can merchants do to identify and protect it? In this guide, we’ll share some tips and tricks to help you stay safe.
You’d get an email from somebody claiming to be foreign royalty. The sender would say they need you to give them a small, temporary loan. In exchange, you’d be entitled to a big reward later, once the prince reclaims the family fortune. Authorized push payment fraud actually has a lot in common with that trick, just in a more modern format.
APP fraudsters will begin by researching their victims. They will then carefully engineer a scenario through which they will attempt to manipulate an individual into approving a payment or releasing sensitive account information.
How Push Payment Fraud Works
Common Tactics Used in Push Payment Fraud Attacks
TL;DR
Common push payment fraud tactics include impersonation scams, romance scams, investment and cryptocurrency scams, and employment scams, to name just a few.
There’s a good reason why fraudsters engage in push payment fraud. While defeating bank-grade encryption and tokenization technology is virtually impossible, bypassing a busy merchant or consumer’s sense of skepticism is surprisingly easy.
By using psychological triggers like fear, greed, or altruism, scammers trick victims into voluntarily initiating payments. In other words, push payment fraud hinges on “hacking” the human sender behind the transaction.
Common types of push payment attacks include:
Impersonation Scams
These attacks succeed by borrowing the authority of trusted institutions. A fraudster might call posing as a bank fraud investigator and claim your account is compromised. Of, he could pose as an IRS agent threatening arrest for unpaid taxes.
To make things more believable, push payment fraudsters may spoof their calls so that it appears to come from a legitimate number. This may compel flustered victims to comply with demands to move funds without verifying the caller’s identity first.
Romance Scams
This is the “long con” of APP fraud. Scammers build deep, emotional relationships with victims over weeks or months on dating apps or social media.
Once the victim is invested and convinced they’re chatting with a friend or lover, the fraudster concocts a crisis, like a medical emergency, a blocked business deal, or travel costs, to request money. Because the victim believes they are helping a friend or loved one, they may ignore warning signs that are present.
Purchase Scams
In this scenario, fraudsters list high-demand goods, such as concert tickets or electronics, at “too good to be true” prices on platforms like Facebook Marketplace or Craigslist. They demand payment via a P2P app like Venmo, which offers limited buyer protection. Once the money is pushed, the seller ghosts the buyer, and the goods are never delivered.
Investment & Cryptocurrency Scams
Fraudsters lure victims with promises of guaranteed, high-yield returns on phantom investments or fake crypto trading platforms. In these “pig butchering” scams, fraudsters often use sophisticated dashboards that show fake profits to encourage victims to invest even more money before the platform inevitably shuts down.
It’s a big threat: Chainaanalysis reports that crypto-related push payment fraud exceeded $10 billion in 2024 alone.
Employment Scams
These scams involve fake job offers that require the applicant to pay bogus upfront startup fees or equipment costs via a push payment. Scammers may also layer in overpayment scam tactics by sending the victim a fake check, asking them to deposit it, and then wiring some excess funds back before the check bounces. This tactic targets desperate jobseekers and younger victims who may not be as familiar with check clearing times.
Family Emergency Scams
Also known as grandparent or relative scams, these involve a fraudster contacting an elderly victim claiming to be a grandchild or younger relative in legal trouble or a hospital. The scammer begs for immediate bail money or medical fees, pleading, “Don't tell my parents!”
AI voice cloning technology can even allow bad actors to mimic a grandchild or relative’s voice perfectly, making the terrifying narrative nearly impossible to disbelieve in the moment.
Utility & Subscription Scams
Fraudsters send texts or emails warning that power, water, or internet services will be disconnected immediately due to an unpaid bill. The false urgency panics the business owner or consumer into paying a fake invoice to maintain service.
In other variations, they claim a subscription has just auto-renewed for a large amount. This tricks the victim into calling a support line where they are coerced into paying bogus cancellation or refund fees.
Protect your revenue against third-party fraud chargebacks, regardless of the source.
Push payment fraudsters are especially interested in going after well-resourced businesses. The rationale is obvious: tricking a single victim into sending a lot of money is more profitable and efficient than having to carry out dozens of low-value push payment scams.
From a tactical standpoint, scammers may also intentionally target complex push payments. For instance, those involving several steps or complicated pre-transaction procedures.
These two facts mean that certain push payment transactions are especially vulnerable to APP attacks. Examples include:
High-Value Transactions
The more money involved in a single transaction, the more likely it is to be a target of push payment fraud. Scammers can deliberately coax merchants or individuals into authorizing transactions worth tens or even hundreds of thousands of dollars by posing as individuals that might be involved in high-value transactions, like escrow agents or title company staff.
Vendor & Supplier Payments
Most legitimate business transactions involve a paper trail of evidence. As a best practice, purchases should involve a purchase order, invoice, or receipt. Some push payment scammers, however, will send over fake invoices and hope that your accounting or procurement team fails to triple-check.
Did You Know?
Businesses unintentionally pay fake invoices all the time. One of the most high-profile cases involved a scammer named Evaldas Rimasauskas, who impersonated a legitimate company and sent fake invoices to Google and Facebook. The tech giants, none the wiser, simply paid the bills. Rimasauskas successfully stole and subsequently laundered over $120 million before he was caught and sentenced to 5 years in prison.
Cross-Border Payments
International payments involve multiple banks, intermediaries, currencies, languages, and regulatory frameworks, which makes them more complex than domestic transactions. This, combined with the fact that cross-border payments are easier to launder and more difficult to unwind, makes them a prime target for push payment fraud.
Real-Time Payments
Instant push payments are convenient because they’re fast. But speed also comes at the cost of security. If funds fall into the wrong hands, they can disappear well before victims have time to react.
