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Real-time Risk Scores Target Digital Payment Fraud Origination
A new system to assign real-time risk scores to digital payments aims to curb financial fraud by identifying mule accounts. While data reveals substantial amounts involved in past frauds, the initiative could significantly enhance digital payment.
When digital payments are processed, the underlying risk often remains opaque until fraud occurs. A new system in the Indian financial sector, involving real-time 'scores' for digital deposits, is set to assign risk parameters to transactions, akin to credit scoring for loans. This initiative, driven by the Indian Digital Payment Intelligence Corporation (IDPIC), aims to track originators of money transfers, specifically targeting accounts used for illicit activities.
Data from Lok Sabha questions indicates that between FY22 and FY26 (until September '25), payment frauds involved significant amounts. Credit card frauds led with 243,849 incidents, involving approximately $15.06 million (₹1,447.27 crore) with $1.85 million (₹177.78 crore) recovered. Internet banking frauds, while having a similar number of incidents at 242,562, saw a higher amount involved, approximately $17.99 million (₹1,730.14 crore), but a lower recovery rate of $0.26 million (₹24.83 crore). Total reported frauds amounted to 583,291 cases, involving about $37.33 million (₹3,588.22 crore) with only $2.48 million (₹238.83 crore) recovered, highlighting the pervasive nature and low recovery rates of digital payment fraud.
The obvious reading suggests a direct correlation between assigning risk scores and reducing fraud. However, the more profound implication isn't just about preventing individual transactions, but about fundamentally altering the operational landscape for cyber criminals. By creating a 'suspects' registry and enabling banks to conduct enhanced due diligence on new accounts, the system shifts focus from reactive fraud detection to proactive originator identification. This proactive stance could disrupt the entire fraud ecosystem, making it riskier for criminals to open and utilize mule accounts.
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