Payment Fraud Landscape in Singapore:

• 49% of respondents have experienced payment fraud
• 33% of consumers feel less safe shopping compared to ten years ago
• 52% of businesses reported an increase in fraud attempts in the past year

Top Types of Payment Fraud in 2025:

1. Phishing

• Social engineering attacks to steal personal information
• Increasingly sophisticated, using synthetic identities
• In 2024, victims lost S$59.4 million to phishing scams

2. Refund Fraud / Policy Abuse

• Exploiting business return, refund, and promotion policies
• It can be conducted by professional fraudsters and every day consumers
• Experienced by nearly half of online merchants worldwide

3. Card Testing

• Testing stolen cards to verify their active status
• Active cards can be sold at higher prices on the dark web

4. Friendly Fraud / First-Party Fraud

• Consumers making purchases and then requesting chargebacks
• Accounts for up to 70% of credit card fraud
• Costs the industry over US$132 billion annually

Business Response to Fraud:

• 66% considering partnerships with providers offering chargeback liability guarantees
• 62% using AI to prevent fraudulent transactions
• 60% recognize fraud increases during peak shopping periods

Additional Payment Trends:

• 31% of Singaporeans don’t carry wallets
• 48% used mobile wallets in the past year
• QR code payments grew 31% year-on-year
• 51% shopped via social media platforms

The report highlights the growing sophistication of payment fraud and the need for robust security measures in Singapore’s digital payment ecosystem.

Payment Fraud Versions and Prevention Strategies:

1. Phishing Characteristics:

• Sophisticated social engineering attacks
• Aim to steal Personal Identifiable Information (PII)
• Advanced tactics include creating synthetic identities
• In 2024, caused S$59.4 million in losses in Singapore

Prevention Methods:

• Implement robust second-factor authentication (2FA)
• Educate consumers about identifying suspicious communications
• Use AI-powered fraud detection systems
• Develop advanced identity verification technologies
• Regularly update security protocols to counter emerging tactics

2. Refund Fraud / Policy Abuse Characteristics:

• Exploiting business return and refund policies
• Conducted by both professional fraudsters and opportunistic consumers
• Difficult to detect
• Affects nearly 50% of online merchants globally

Prevention Methods:

• Develop clear and strict refund policies.
• Implement sophisticated tracking systems for returns
• Use AI to identify suspicious return patterns
• Set reasonable time limits for returns
• Create detailed documentation requirements for refunds
• Monitor customer behaviour and flag unusual return activities

3. Card Testing Characteristics:

• Fraudsters test stolen credit card details
• Aim to verify card validity
• Successful cards sold at higher prices on the dark web

Prevention Methods:

• Use advanced payment gateway fraud detection
• Implement real-time transaction monitoring
• Utilize machine learning algorithms to detect unusual transaction patterns
• Set up velocity checks to limit multiple quick transactions
• Use device fingerprinting technology
• Implement CAPTCHA and additional verification for suspicious transactions

4. Friendly Fraud / First-Party Fraud Characteristics:

• Consumers make legitimate purchases, then request chargebacks
• Accounts for 70% of credit card fraud
• Costs the industry over US$132 billion annually

Prevention Methods:

• Maintain detailed transaction and delivery records
• Implement clear communication channels with customers
• Use chargeback management software
• Provide excellent customer service to resolve issues proactively
• Develop comprehensive documentation for each transaction
• Create transparent return and refund policies

Advanced Prevention Strategies:

1. Technology Integration

• 62% of businesses now use AI for fraud prevention
• Leverage machine learning and predictive analytics
• Implement real-time fraud detection systems
• Use blockchain for secure, transparent transactions

2. Authentication Techniques

• Encourage second-factor authentication (2FA)
• Biometric verification
• Tokenization of payment information
• Continuous authentication during transactions

3. Consumer Education

• Raise awareness about fraud tactics
• Provide guidelines for safe online shopping
• Encourage vigilance and reporting of suspicious activities

4. Collaborative Approaches

• 66% of businesses considering partnerships with secure payment providers
• Share fraud intelligence across industries
• Develop cross-platform fraud detection networks

The evolving landscape of payment fraud requires a multi-layered, adaptive approach. Businesses must continuously update their prevention strategies, leverage advanced technologies, and maintain a proactive stance against emerging fraud tactics.