What is Push Payment Fraud?Even Authorized Payments Aren’t Scam-Proof
What is Push Payment Fraud? Definitions & Overview
It’s safe to assume that if a transaction is “authorized,” it must be safe…right?
After all, if a customer logs in, passes biometric checks, and willingly hits the “send” button themselves, how can that be fraud?
Unfortunately, cybercriminals are cunning and deceitful. By using social engineering tactics to manipulate people into authorizing payments, bad actors can defeat the human factor in otherwise secure push payment transactions. In this article, we take a look at how push payments work and how fraudsters exploit senders who initiate them.
Push Payment Fraud
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.
What is a Push Payment?
Push payments are when senders initiate and authorize payments to recipients. This stands in contrast to pull payments, which happen when recipients request (or “pull”) funds from senders.
Before diving into push payment scams, let’s clarify what we’re talking about.
In essence, a push payment is a merchant-initiated payment. They let merchants provide invoices to buyers. Sellers can also submit payment requests through P2P apps like Venmo or Cash App. Buyers can then fulfill payments themselves; they don’t need to wait for merchants to batch and submit transactions for settlement.
Merchants can initiate push payments using digital wallets. They can also send a push notification to the user about initiating a card-not-present (CNP) transaction, a wire transfer, or even cash. Or, they can provide invoices or other requests for payment to customers. Buyers can then pay at their own convenience, or schedule a transfer for later.
What is Push Payment Fraud?
- Push Payment Fraud
Authorized push payment fraud, or APP fraud, happens when a cybercriminal tricks a consumer into authorizing a payment under false pretenses. During the APP scam, the fraudster will pretend to be someone the individual trusts, like a bank or utility provider, then attempt to convince the individual to authorize the payment without much consideration.
[noun]/po͝oSH • pā • m(ə)nt • frôd/
Push payment fraud involves manipulation of push payment users by a scam artist. Here, the fraudster uses deception, threats, or false urgency to trick victims into initiating (or “pushing”) payments to unintended recipients.
For example, fraudsters may pose as a legitimate recipient, like a friend, vendor, or business associate. Other times, they may coerce or blackmail victims into sending payments to recipients they do not know.
No matter the tactics employed, though, the outcome of all push payment scams are basically the same: they cause individuals or merchants to unfairly lose hundreds or thousands of dollars.
