The Trillion Dollar Threat: How to Stop Authorized Push Payment (APP) Fraud

Authorized Push Payment (APP) fraud has quickly become one of the most damaging forms of payment crime in the world. Unlike account takeovers, authorised Push Payment fraud tricks people and businesses into willingly authorizing a payment to a fraudster’s account, often after trust has been falsely earned over time. Once money is sent, it’s often gone for good.

According to the Global Anti-Scam Alliance (GASA), over $1 trillion was stolen worldwide through scams and fraud in a single year.  In the U.S., victims experienced some of the highest per capita losses globally, averaging $3,520 per person. Denmark followed closely, with an average of $3,027 per victim. In Hong Kong, the frequency of exposure is striking, one in three citizens encounters a scam attempt every week. A major share of this loss is driven by Authorized Push Payment (APP) fraud, which has surged alongside the adoption of instant and real-time payment systems.

This is no longer just a consumer issue. Businesses and institutions are also exposed, making APP fraud an existential trust problem for banks, payment service providers (PSPs), and fintechs. If customers don’t feel protected, they leave, which is why fraud prevention is a top priority across the financial ecosystem of banks, PSPs and fintechs.

What Is APP Fraud?

APP fraud (Authorized Push Payment fraud) occurs when criminals convince someone to send money to the wrong account. It’s different from other payment fraud because the victim authorizes the transaction, believing it to be genuine.

Once authorised, banks and payment providers often have little chance to reverse the transfer. That’s why APP fraud is so damaging, it relies on falsely earned trust, and the money moves quickly.

Why Is APP Fraud Increasing?

Several trends explain why APP fraud is rising worldwide:

• Instant payments: Systems like UK Faster Payments, EU SEPA Instant, Singapore’s PayNow, and the United States Fed Now and RTP move money instantly, making it hard to stop fraud in time.

• Smarter digitally native scams: Fraudsters use social engineering, fake invoices, and even AI tools like voice cloning and deepfakes to trick victims.

• Cross-border complexity: Payments that move across countries and banks often lack consistent verification checks.

The result? More victims and higher losses every year.

Common Types of APP Fraud

APP fraud affects both businesses and consumers, though the scams look different depending on the target.Business & corporate exposure: Companies are often hit with invoice redirection scams, where accounts teams are tricked into paying fake invoices. A well-known case involved U.S. agribusiness Scoular, which lost $17 million in a CEO fraud scheme. Fraudsters impersonated senior executives and sent false payment instructions, tricking the company’s accounts team into authorizing the transfer.

• Consumer exposure: Individuals are more likely to fall victim to impersonation scams, which take many forms. Fraudsters may pose as employers (fake job scams), romantic partners (romance scams), or financial advisors (investment scams), convincing victims to authorize payments under false pretences.

• Although the details differ, all APP scams rely on winning trust before the fraud happens.

The Cost of APP Fraud

The financial losses are massive, and the hidden costs are just as serious. In the UK, new data shows that £450.7 million was lost to APP scams in 2024, only a modest 2% decline from 2023 levels.

Some victims are now reimbursed, and rules are changing fast. The UK mandates reimbursement, the EU’s Instant Payments Regulation (IPR) and related Verification of Payee (VoP) mandate makes PSP payer-and-payee liability a shared responsibility and goes live in October 2025.Other regions are developing similar schemes. That means banks and payment providers are increasingly liable, not just consumers.

For financial institutions providing payment services, APP fraud creates:

• Higher reimbursement payouts

• More pressure on fraud investigation teams

• Regulatory reporting obligations

• Reputational damage when customers lose trust

How to Prevent APP Fraud with KYP

Stopping authorised Push Payment fraud requires action before money leaves the account. That’s where Know Your Payee (KYP) comes in.

KYP is a real-time payee verification process that confirms whether account details match the intended recipient. Instead of relying only on fraud detection after payment, KYP checks the payee upfront.

With KYP, banks, PSPs, and businesses can:

• Verify account names instantly

• Confirm accounts exist and belong to the right institution

• Access additional intelligence like risk scores or currency details

KYP also works alongside domestic schemes such as CoP in the UK and VoP in the EU, while enabling similar protection in markets where no such framework exists, including cross-border transactions. This pre-payment protection not only reduces fraud and prevents costly errors, but it also delivers value across the ecosystem.  

Banks and PSPs can strengthen bank fraud prevention, fintechs can improve their fraud prevention measures and offer safer payouts and build trust into digital journeys. Corporates can defend against supplier scams and invoice fraud, and consumers gain peace of mind when sending money locally or internationally.

Upfront Know Your Payee (KYP) Solves Fraud

APP fraud is one of the most damaging forms of payment fraud, a $1 trillion global problem that erodes customer trust. With instant payments becoming more prevalent globally, prevention must happen at the point of transfer.

Know Your Payee (KYP) offers that protection. By verifying payee details in real time, financial institutions and businesses can stop APP fraud before it happens, protect their customers, and build lasting trust in the payments system.

Solutions like iPiD Validate make this possible by providing a single API that enables real-time payee verification across multiple markets, ensuring faster payments are also safer payments.

References

• Global Anti-Scam Alliance (GASA) – Global State of Scams Report 2024: $1 trillion stolen in 12 months (2024).

• UK Finance – Annual Fraud Report 2025: Insights on UK Payment Fraud Trends (2025).

• ACI Worldwide – Mandatory reimbursement rules for APP fraud drive operational and financial pressure on banks (2024).