Push Payment Fraud

Authorized push payment fraud, often called APP fraud, occurs when a cybercriminal deceives a consumer into approving a payment under false pretenses. In an APP scam, the fraudster typically poses as a trusted entity, such as a bank or utility provider, and persuades the individual to authorize the payment without careful consideration.

Push payments offer advantages, such as faster fund transfers for merchants and the convenience of not requiring customers to divulge personal information for purchases.

The system is vulnerable to exploitation by cunning fraudsters, and both cardholders and merchants can suffer financial losses due to authorized push payment fraud.

Pull Pay:

• The merchant requests payment from the buyer.
• The buyer authorizes the payment, and the merchant submits it for clearing.
• The issuer releases funds to cover the authorized amount.
• The merchant acquirer receives the funds.

Push Pay:

• The merchant initiates a payment request to the buyer.
• The buyer initiates the payment to the merchant.
• The buyer authorizes the payment, submitting it directly for clearing.
• The merchant acquirer receives the funds.

Fraudsters have already found ways to exploit the system. Although authorized push payment fraud lacks sophisticated technology, it is highly effective at separating both cardholders and merchants from their money.