As digital payments continue to evolve, so too does fraud. Criminals are becoming more sophisticated, exploiting new technologies, changing consumer behaviours and gaps in security to target merchants across sectors. For businesses accepting payments online, in-store or remotely, understanding emerging fraud trends is essential to protect revenue, reputation and customer trust.
Why fraud is changing so quickly
Fraud in the payments space is evolving faster than ever because the same factors driving digital commerce growth also create more opportunities for attackers. 74% of merchants have added at least one new payment method in the past year, including digital wallets, mobile payments and buy now pay later options. Each new channel brings additional layers of complexity that require equally advanced fraud prevention strategies.
In the UK, GBP 1.17 billion was lost to fraud, including authorised and unauthorised, in 2024, an increase of 0.4% compared with 2023. This increase highlights that, in tandem with advances in security, fraud continues to grow alongside digital commerce, emphasising the need for merchants to strengthen their prevention strategies.
The result is a fast-moving environment where fraud tactics continually evolve, testing verification processes, authentication methods and increasingly complex payment journeys. For merchants, this means fraud prevention must evolve alongside payment innovation. By combining advanced technology, data driven insights and seamless authentication, businesses can strengthen security while preserving a smooth and trusted customer experience.
Key emerging fraud trends to watch
Authorised push payment fraud
Authorised push payment fraud (APP fraud) is a form of social engineering in which criminals impersonate trusted organisations or individuals to persuade customers to approve payments themselves. Because the transaction is authorised by the payer, recovery can be complex, creating financial exposure for customers and reimbursement challenges for financial institutions. It also poses reputational and operational risks for legitimate businesses whose identities may be misused.
Friendly fraud and abuse of chargebacks
Friendly fraud occurs when a legitimate customer disputes a transaction with their bank, even though the purchase was valid. In some cases, this may be accidental, for example, when a cardholder does not recognise a transaction in their bank statement or forgets about a subscription renewal. In other cases, it can be deliberate, with customers seeking refunds while keeping the delivered goods or services.
Fraud targeting buy now pay later
BNPL fraud can include account takeover, synthetic identities or customers misusing repayment terms. While BNPL providers include built-in security measures, these transactions often involve limited upfront verification, making careful monitoring essential. Merchants offering BNPL should implement strong identity checks, transaction monitoring and fraud detection tools to reduce risk.
Credit card fraud
Credit card fraud occurs when fraudsters use stolen card details to make unauthorised purchases, often testing small transactions before moving on to higher values. While security measures such as tokenisation and authentication have reduced certain risks, card fraud continues to evolve, particularly in card not present transactions where purchases are completed remotely.
Essential fraud prevention strategies
3D Secure 2
3D Secure 2 adds an extra step during checkout to confirm the cardholder’s identity as part of Strong Customer Authentication (SCA). It balances security and user experience, helping prevent unauthorised transactions while allowing legitimate payments to proceed smoothly.
Multi-factor and two-factor authentication
These authentication methods require multiple forms of verification, such as one-time codes, app notifications or biometrics like fingerprints or facial recognition. They make unauthorised access much harder and work alongside SCA to strengthen transaction security.
Card security code (CVV) verification
CVV verification requires customers to enter the three or four digit security code printed on their card during checkout. Because this code is not typically stored in merchant databases, it adds an additional layer of protection against the misuse of stolen card details.
Digital ID
Digital ID verification enables merchants to confirm a customer’s identity in an online environment using document checks, biometric verification or trusted data sources. This is particularly valuable in reducing account takeover attempts, synthetic identity fraud and high-risk remote transactions.
End-to-end encryption
End-to-end encryption protects sensitive payment data from the moment it is captured to the point it reaches the payment processor. By encrypting cardholder information at source, merchants significantly reduce the risk of data being intercepted, altered or exposed during transmission.
Working with a trustworthy PSP
Partnering with a reliable payment service provider plays a critical role in building a resilient fraud prevention strategy. A strong PSP offers advanced fraud detection tools, real time monitoring, risk scoring and adaptive authentication that respond dynamically to emerging threats.
How emerchantpay can help your fraud prevention strategy
emerchantpay combines advanced fraud detection tools, intelligent monitoring and expert risk support to help merchants prevent losses and protect customers. Our solutions, including tokenisation, 3D Secure 2 and tailored authentication strategies, keep payments secure without disrupting the customer experience.
To protect your business in a rapidly shifting fraud landscape, merchants need a proactive and layered approach. By working with a trusted payment partner with advanced technology, strong processes and continuous evaluation, merchants can protect revenue, enhance customer trust and support sustainable growth.
Contact us to find out how emerchantpay can help you strengthen your fraud prevention strategy.