Financial losses from authorized push payment (APP) scams in the UAE are expected to surge by a staggering 43% year-on-year in 2024, according to ACI Worldwide in partnership with GlobalData. The newly released Scamscope report highlights that APP scam losses in the UAE reached $8.3 million this year and are forecast to climb to $30.3 million by 2028, with a compound annual growth rate (CAGR) of 29.6%.
APP scams exploit trust to deceive victims into transferring money directly to fraudsters. These scams often bypass traditional fraud detection systems, presenting a significant challenge in today’s digital payments landscape. The UAE, which is part of the rapidly expanding real-time payments market, is particularly vulnerable as scammers exploit the immediacy of real-time transactions. By 2028, losses from APP scams via real-time payments in the UAE are projected to account for 90% of total APP scam losses, reaching $26.8 million with a CAGR of 30.3%.
Investment Scams: A Growing Concern
Investment scams dominate in the UAE, accounting for 29% of APP scam victims, while nearly 20% fall prey to advance payment scams. These trends mirror other Middle Eastern nations, such as Saudi Arabia, where a significant rise in investment scams has been observed. The 2022 Scamscope report also projected a 26% CAGR in APP scam losses for Saudi Arabia between 2022 and 2027, underscoring a regional challenge.
Victims often lose trust in their financial institutions, with one in five victims in the UAE severing ties with their banks. This highlights the urgent need for banks to strengthen fraud prevention and foster trust among their clients.
Expert Insight
“The UAE government has demonstrated commendable vision in introducing its real-time payments platform, Aani, which offers incredible convenience to businesses and consumers. Real-time payment rails have the potential to be the most trusted and secure payment rails, but the proliferation of real-time payments and the concurrent rise of AI-driven financial crimes necessitate a paradigm shift in fraud strategies to stay ahead of evolving threats,” stated Santhosh Rao, Senior Vice President, Sales – MEASA, ACI Worldwide.
Proposed Solutions to Combat APP Scams
The report emphasizes adopting AI-driven fraud management systems to mitigate these scams. Such systems can analyze transactions, detect anomalies, and facilitate real-time collaboration across financial institutions. Furthermore, cross-border cooperation and public education are crucial to addressing the challenges posed by increasingly sophisticated scams.
As the UAE transitions toward a cashless economy, strengthening fraud prevention measures will play a pivotal role in minimizing financial losses and enhancing public confidence in the country’s digital infrastructure
