What your credit union can do to prevent losses as P2P fraud continues to rise

Person-to-person (P2P) fraud continues to be a top concern for credit unions and members alike. And it’s no wonder; as the ease in which consumers can make touchless payments continues to boom, opportunistic criminals are finding ways to capitalize on their popularity.

P2P payments increased substantially during the pandemic, with Venmo processing $230 billion in payment volumes in 2021, an increase up of 44% from the previous year. Zelle®, with the added advantage of being embedded into many popular credit unions and banks’ mobile banking apps, processed a record $490 billion, representing 62% growth in year-over-year transactions.

Why is P2P fraud growing?

P2P fraud is taking off because savvy fraudsters tend to go where the action is. Younger generations are embracing this convenient channel over traditional payment methods.

The advent of fast funds, where users have the option to pay a 1% fee to have funds immediately credited to their bank account is further pressuring issuing financial institutions to authenticate transactions quickly. This puts issuers between a rock and hard place, with the expectation for quick funds availability but the possibility of fraud losses for both customers and the issuers.


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