Scams and payment fraud continue to pose a significant threat to Australians and the businesses that serve them.
According to the ACCC, Australians reported more than $2 billion in scam-related financial losses in 2025. Of the 481,523 scam reports submitted, 274,577 involved financial losses, totalling $2.18 billion. While the number of reports has remained relatively stable, losses increased by 7.8% compared with 2024. Encouragingly, this figure represents a 29.7% reduction from the peak of $3.1 billion recorded in 2022, reflecting the impact of increased awareness, prevention initiatives, and enforcement — but also reinforcing the need to remain vigilant as fraud tactics evolve.
Beyond scams, payment‑related fraud remains widespread. Australian Bureau of Statistics data for FY 2024–25 shows that 10% of Australians (approximately 2.3 million people) experienced card fraud, a rate consistent with the previous financial year. While overall scam victimisation declined slightly — from 3.1% in 2023–24 to 2.7% in 2024–25, card fraud continues to affect millions of Australians each year.
For businesses that process payments, especially through digital platforms, these figures highlight an important shift: fraud is increasingly targeting payment infrastructure itself. As more transactions move online and into software platforms, payment fraud becomes not just a financial risk but a product and trust risk.
For software companies embedding payments into their platform, an understanding of payment fraud is critical. Beyond protecting cardholder data and minimising losses, effective fraud prevention helps maintain customer trust, regulatory compliance, brand reputation, operational efficiency, and long‑term growth.
Throughout this blog, we delve into what payment fraud is, the most prevalent types of fraud, and introduce payment fraud detection and prevention through the lens of a software company embedding payments into their core product offering.
If you’re new to payments or trying to determine if Embedded Payments are right for you, this blog will serve as a helpful introduction to the evolving payments fraud landscape and what to look out for to ensure your payments data is safe from fraudsters and their sophisticated attacks.
What is payment fraud?
Payment fraud is any activity that manipulates payment systems to access funds or financial information illegally. Real-life examples of payments fraud include identity theft, unauthorised purchases, chargeback fraud, refund fraud, and more. These activities can significantly affect businesses and consumers. To protect payments processed through your platform, you’ll want to stay informed about the latest types of fraud and prevention and detection methods.
Types of payment fraud
There are several types of payment fraud that software companies should be aware of to ensure the safety of their users’ financial and payments data. Below are the most prevalent types. We will discuss how to detect and prevent these types of fraudulent activities in the next section.
- Phishing involves fraudsters using fake emails, text messages, or websites to collect sensitive financial data such as login credentials and credit card details.
- Card skimming occurs when bad actors capture card information at payment terminals, often using a device that is inconspicuously attached to the card reader.
- Identity theft is the result of personal information being stolen and used to make fraudulent purchases or transactions.
- Chargeback fraud is often referred to as “friendly fraud” and occurs when a consumer makes a legitimate purchase with their credit card and requests a chargeback from the issuing bank after receiving the purchased goods or services.
- Business email compromise is a sophisticated attack by fraudsters who target companies that conduct wire transfers. Bad actors typically pretend to be a company executive or supplier to start fraud transfers unbeknownst to the organisation.
- Card-not-present (CNP) fraud involves stolen card information being used to make an online purchase without the physical card present.
- Credit card and debit card fraud is straightforward in definition, but complex in detection. This type of fraud involves the unauthorised use of a credit or debit card to make a purchase or withdraw funds.
- Wire transfer fraud involves bad actors starting a wire transfer from a stolen account.
- Check fraud happens when a fraudster uses forged or altered checks to make unauthorised withdrawals or payments.
- Mobile payment fraud involves unlawful transactions made through mobile payment platforms, such as a digital wallet, contactless payment terminal, peer-to-peer transfers (think: Venmo and PayPal), and banking integrations.
Payment fraud detection and prevention for software companies
Understanding the common types of payments-related fraud is essential for ensuring effective fraud prevention and detection in your platform and at your organisation. Staying vigilant and aligning yourself with a full-service payments partner, like Worldpay for Platforms and our team of experts, can help to ensure you’re properly preventing and detecting payment fraud using a variety of strategies, secure payments products, and techniques.