What Are Payment Frauds in India: Types, Targets and Tips to Avoid

Online payment fraud has emerged as one of India’s fastest-growing digital threats, with cybercriminals stealing around ₹22,842 crore in 2024, according to a report. 

That is nearly triple the amount lost in 2023 and almost ten times more than the figure reported in 2019. The Indian Cybercrime Coordination Centre (I4C) warns that citizens may lose over ₹1.2 lakh crore this year, underscoring how swiftly digital fraudsters are adapting and expanding across the nation.

With this blog, we aim to guide our readers about common types of payment fraud, industries at risk and safety tips to prevent fraud. Let’s get started! 

Quick Synopsis 

• Common types of payment fraud include mobile payment fraud, SIM swap, phishing, account takeover, identity theft, UPI/QR scams, etc.
• Industries most at risk are banking & finance, digital businesses, retail and hospitality.
• Protect yourself by keeping personal details private, using secure apps and websites, and monitoring accounts regularly.

9 Types of Common Payment Frauds in India

To safeguard your money from payment fraud, first, you need to know some of the common frauds that are currently happening in our country. These are some of them:

1. Mobile Payment Fraud: Scammers exploit mobile payment systems using phishing and fake apps. 
2. SIM Swap Fraud: In SIM swap fraud, fraudsters deceive telecom companies into issuing a new SIM card with the victim's phone number. This grants them access to OTPs and banking messages, allowing them to carry out unauthorised transactions.
3. Chargeback or Friendly Fraud: Customers falsely dispute legitimate purchases, leading to financial losses for businesses.
4. Account Takeover (ATO): Hackers hijack user accounts to make unauthorised transactions.
5. Spoofing: Fraudsters send fake emails or create fake websites to steal sensitive info like passwords or bank details.
6. Bank Transfer or Wire Fraud: Scammers trick individuals or businesses into transferring money to fake bank accounts.
7. Identity Theft: Thieves use stolen personal information to open fake accounts or make unauthorised transactions.
8. UPI and QR Code Scams: Fraudsters send fake QR codes or payment requests that trick users into approving payments. Once approved, money is instantly deducted, leading to immediate financial loss.
9. Malicious Payment Links: Scammers send fake payment links via SMS or WhatsApp that lead to fraudulent websites. These sites steal users’ payment details by mimicking legitimate pages.

5 Key Industries at Risk of Payment Fraud 

Some industries are more vulnerable to payment fraud than others. Here are the sectors that face the highest risk:

Banking & Finance

Because of the large number and high value of transactions, banks are a favourite target for fraudsters. They constantly battle cyberattacks while trying to keep banking easy and secure for customers.

Digital Businesses

Companies that sell online or offer digital products face huge risks since most of their payments happen online. Card-not-present transactions are easier for fraudsters to exploit.

Retail

Both online and physical stores are at risk. Online retailers face more danger from card-not-present (CNP) fraud, while in-store shops deal with issues like fake returns or counterfeit cards.

Hospitality

Hotels and restaurants are exposed to risk due to high transaction volumes and shared payment systems. Criminals often go after them to steal credit card details.

Safety Tips to Prevent Payment Fraud 

Protecting yourself from payment fraud requires careful observation and following safety practices:

• Keep Personal Details Private: Never share sensitive information like OTPs, UPI PINs, CVV or passwords over calls, emails or messages. Banks or payment apps will never ask for them.
• Use Secure Websites: Only enter card details on trusted and secure websites. Always double-check the URL or payment link to make sure it is authentic.
• Download Official Apps: Use only verified bank, UPI or payment apps from trusted sources such as the Google Play Store or Apple App Store and keep them regularly updated.
• Set Transaction Limits: Limit how much can be transferred or spent through digital payments to reduce potential loss if your account is compromised.
• Enable Strong Authentication: Turn on biometric login or two-factor authentication (2FA) to add an extra layer of protection.
• Monitor Transactions Regularly: Keep an eye on your account statements and enable real-time transaction alerts for better fraud detection in online payments. This helps you quickly spot and report any suspicious activity.
• Avoid Public Wi-Fi for Payments: Do not make financial transactions on public or shared Wi-Fi networks; use a secure, private connection instead.

Final Word 

Payment fraud is becoming more advanced and poses a serious risk to both consumers and businesses. While it may be impossible to eliminate completely, you can reduce the risk by using the right apps and precautions. 

At Stable Money, the safety of your hard-earned money is our top priority. Your matured funds are directly credited back to the same account used for payment. 

Download the Stable Money app now to start investing safely for attractive returns!