What is payment fraud

What is payment fraud: an updated guide for 2024

Navigating the world of online transactions in 2024 has become increasingly vital for businesses and everyday people. In a time where almost every transaction, from buying a cup of coffee to managing large-scale business operations, happens online, the risks associated with these transactions have also escalated. Simply put, payment fraud occurs when someone illegally uses your money or payment information. It can range from unauthorized credit card charges to complex scams designed to steal financial assets.

As technology continues to advance, so do the tactics of fraudsters. They are constantly finding new and more sophisticated ways to exploit online systems, which makes combating payment fraud a relentless and evolving challenge. This surge in fraudulent activities represents a significant threat not just to individual shoppers, but also to the integrity and financial health of businesses across the globe.

Types of payment fraud

Understanding the Types of payment fraud is essential in developing effective countermeasures. Payment fraud can manifest in various forms, each with unique challenges and implications.

Credit card fraud

Credit Card Fraud is one of the most prevalent types of payment fraud. It involves unauthorized use of someone’s credit or debit card information to make purchases or withdraw funds. Credit card fraud can occur through physical theft, online data breaches, or card skimming devices.

What is payment fraud and abuse?

The question what is payment fraud and abuse?” extends beyond unauthorized transactions. It also encompasses the misuse of payment systems in a way that’s not necessarily illegal but is deceptive or unethical, such as exploiting loopholes for financial gain.

What is regular payment fraud?

Regular payment fraud refers to common fraudulent activities conducted through standard payment channels, including credit and debit card misuse, bank fraud, and online transaction fraud.

Can you report payment fraud?

Victims often ask, can you report payment fraud? Yes, it’s imperative to report any suspected payment fraud to relevant authorities, financial institutions, and if applicable, the police.

What payments are considered improper payments?

In the context of fraud, “What payments are considered improper payments?” typically refers to transactions that don’t comply with legal, contractual, or administrative requirements. This might include overpayments, underpayments, or payments made to ineligible recipients.


Phishing is a deceptive practice where fraudsters trick individuals into providing sensitive data like login credentials or credit card details. This is often done through seemingly legitimate emails or websites.

Identity theft

Identity Theft is a critical component of payment fraud. It involves fraudsters impersonating someone else to make unauthorized transactions or open new accounts using the victim’s personal information.

Chargeback fraud

Chargeback Fraud, also known as “friendly fraud,” occurs when a consumer makes an online purchase and then requests a chargeback from the issuing bank after receiving the purchased goods or services.

Expanding on various types of payment fraud

In addition to the above, let’s delve deeper into other prevalent types of payment fraud:

Friendly fraud

Often overlooked, Friendly Fraud happens when a customer makes an online purchase and then claims it as unauthorized, despite receiving the product or service. It’s a challenging issue for merchants as it’s hard to distinguish from genuine fraud.


Skimming involves illegally capturing credit or debit card information through devices installed on card readers. ATMs and gas station pumps are common targets for skimmers.

Card testing fraud

Card Testing Fraud occurs when a fraudster uses stolen card information to make small transactions to test if the card is still active and not reported as stolen.

Account takeover

In Account Takeover, fraudsters gain unauthorized access to a user’s account and make transactions or changes without the account holder’s knowledge.

Wire transfer fraud

Wire Transfer Fraud involves tricking individuals or businesses into transferring money under false pretenses. It’s often executed via phishing or hacking into email accounts.

Man-in-the-Middle attacks

Man-in-the-Middle Attacks happen when fraudsters intercept communication between two parties to steal data or alter communications for fraudulent purposes.

Return fraud

Return Fraud includes various tactics where individuals defraud a store through the return process, such as returning stolen goods for cash or using counterfeit receipts.

Merchant identity fraud

In Merchant Identity Fraud, scammers create fake merchant profiles or websites to collect payment information from unsuspecting customers.

Counterfeit fraud

Counterfeit Fraud refers to the use of forged or fake payment instruments, like credit cards and checks, to make purchases or withdraw cash.

Triangulation fraud

Triangulation Fraud involves three parties: the unsuspecting customer, the fraudulent seller, and a legitimate online marketplace. Customers think they are purchasing through a legit site, but the fraudster uses stolen card information to buy the goods from the real seller.

What is payment fraud

EMV (Chip) card fraud

Despite the security of chip-enabled cards, EMV (Chip) Card Fraud still occurs, mainly through card-not-present transactions, like online purchases.


Pagejacking is when fraudsters clone a legitimate website to redirect traffic to a fraudulent site, often used in phishing scams.

Affiliate fraud

Affiliate Fraud includes actions that inflate or falsify affiliate marketing transactions to generate unearned revenue.

Advanced fee fraud

Advanced Fee Fraud involves convincing someone to pay a fee upfront to receive something of greater value, like a loan or prize, which never materializes.

Overpayment fraud

In Overpayment Fraud, a scammer overpays for a product or service and then asks the seller to refund the excess amount, typically using a fraudulent check.

CEO fraud/business email compromise

CEO Fraud/Business Email Compromise is a sophisticated scam targeting businesses, where fraudsters pose as company executives to authorize fraudulent financial transfers.

As we conclude our guide on understanding and navigating the complex landscape of payment fraud in 2024, it’s important to focus on solutions that not only combat these fraudulent activities but also enhance your business’s overall performance and customer experience.

Increase conversion and drive profitability

In today’s competitive market, providing a personalized payment experience to every customer is key to increasing conversion rates and driving profitability. By offering a variety of payment options tailored to their preferences, you can significantly improve customer satisfaction and loyalty.

Enter Gr4vy – a revolutionary cloud-native payment orchestration platform that empowers you to route any transaction to your Payment Service Provider (PSP) of choice. Gr4vy is designed to help your business in several critical areas:

Reduce fraud and chargebacks: Gr4vy’s advanced system helps in identifying and preventing fraudulent transactions, thereby reducing the incidence of chargebacks.

Optimize processing fees: With Gr4vy, you have the flexibility to route transactions in a way that minimizes processing fees, ensuring more cost-effective payment processing.

Reduce transaction costs: By streamlining the payment process, Gr4vy aids in reducing overall transaction costs, contributing to better financial efficiency.

Restrict the sale of prohibited goods: The platform ensures compliance with regulations by restricting transactions involving prohibited goods, safeguarding your business.

And more: Gr4vy’s capabilities extend beyond these core areas, offering a comprehensive solution for modern payment processing needs.

Ready to transform your payment processing?

Are you looking to enhance your payment processing capabilities, reduce fraud, and drive more profitable transactions? Gr4vy is here to assist. Get in touch to learn more about how our platform can be tailored to meet your specific business needs. Our team of experts is ready to guide you through every step of the process, ensuring a seamless transition and an optimized payment experience.

Contact us today

Don’t let payment fraud hinder your business growth. Reach out to Gr4vy today and take the first step towards a more secure, efficient, and profitable payment process. Visit our website or drop us an email for more information or to schedule a consultation.

Remember, with Gr4vy, you’re not just choosing a payment platform; you’re choosing a partner dedicated to your business’s success in the dynamic world of digital transactions. Contact us now and elevate your payment processing!