The report aims to provide information on suspected sanctions breaches and assist stakeholders in taking a risk-based approach to compliance.
The statement follows the regulators’ joint Call for Information (CFI) in July which sought to understand the opportunities and risks associated with the increasing popularity of digital wallets.
Focusing on the financial crime elements of the statement, key takeaways include:
➡️ Growth in usage: In 2023, roughly 20% of card users used digital wallets for over half of their transactions, with increased usage providing scammers with more opportunities for phishing attacks and social engineering;
➡️ Unauthorised transactions: Underlying card issuers remain responsible for complying with strong customer authentication (SCA) requirements and digital wallets are expected to become increasingly targeted by fraudsters; and
➡️ Fraud liability: Although digital wallet providers may be responsible for enabling fraudulent transactions, card issuers ultimately remain responsible for the reimbursement of unauthorised payments.
✅ Card issuers regulated by the PSR and FCA should review their fraud prevention frameworks, ensuring robust controls are in place to effectively mitigate non-plastics fraud risks.
💡 Plenitude’s Fraud Prevention Practice conducts comprehensive threat assessments, advising clients on preventative measures to ensure compliance and prevent losses in an evolving threat landscape. Visit our website for more information: https://www.plenitudeconsulting.com/services/fraud-prevention-services