India’s Digital Payment Fraud Risk Soars to ₹48,021 Cr by FY26

Online payment scams in India have intensified, forming an organized network that threatens the digital payment ecosystem. A recent Experian report, “The New Frontier: Emerging Trends in Fraud Prevention,” highlights a concerning trend: while the number of fraud cases has decreased, their financial value has surged.

The amount involved in suspected fraudulent applications is projected to grow fourfold. This figure is set to rise from ₹12,230 crore in FY24 to an estimated ₹48,021 crore by FY26, indicating a significant escalation of risk.

Rising Threats and Vulnerabilities

Several factors contribute to this sharp increase in online fraud attacks. Account takeover stands as the most prevalent threat, with 77% of surveyed respondents reporting an increase, pointing to vulnerabilities in digital access and authentication processes.

Money muling and identity theft also pose significant challenges, with 71% of respondents noting their rise. This underscores the role of organized, network-driven fraud schemes that leverage stolen identities and intermediary accounts.

Synthetic business fraud and first-party fraud show the highest ‘significant increase’ at 39%. This suggests a shift towards more deliberate and high-impact fraud schemes targeting businesses and individuals.

Complex Fraud Management

Identifying and preventing specific fraud types proves particularly challenging for organizations. Authorised Push Payment (APP) fraud is cited as the most difficult threat, with 58% of organizations struggling to manage it effectively.

In APP fraud, victims are manipulated into willingly authorizing payments to fraudulent accounts. These schemes often employ sophisticated phishing, impersonation, or fake investment tactics to deceive targets.

Identity theft remains a persistent challenge for 54% of organizations, while money mule activities trouble 53%. The diversification of fraud types, including first-party fraud, synthetic identities, and deepfakes, impacts 52% of organizations, indicating a broad spectrum of sophisticated tactics.

Operational Hurdles for Financial Institutions

Financial institutions face multiple barriers in preventing and responding to these evolving fraud landscapes. Agility is a major concern, with 48% of organizations struggling to rapidly update their fraud models and rules to counter new threats.

Data and technology limitations also impede effective prevention. Specifically, 47% lack adequate device data, and 44% lack real-time monitoring capabilities, hindering the early detection of advanced fraud.

Operational inefficiencies, such as manual reviews (43%) and high false positives (42%), impact cost, speed, and revenue. These issues highlight a critical need for more automated and precise decisioning systems across the sector.

Manish Jain, Country Managing Director of Experian in India, emphasized the path forward. He stated that combining data, analytics, and broader intelligence will be crucial for organizations to protect customers, enhance operational resilience, and support sustainable growth in the evolving digital market.