Japanese Firms Collaborate to Fight Payments Fraud
A group of Japanese companies has launched an information-sharing program to prevent smartphone-based payments fraud.
As Nikkei reported on Wednesday (Dec. 22), the companies – which include NTT Docomo and Line Pay – are making this move amid a rise in phishing cases, in which scammers direct users to phony websites to steal their information.
The report cites figures from the Council of Anti-Phishing Japan, which says phishing cases rose to more than 224,000 in 2020 before doubling to 460,000 for the first 11 months of 2021.
The information-sharing network will be created in the spring of 2022 by the Payments Japan Association, a group of banks, credit card companies and smartphone payment providers.
Caulis, a security company from Tokyo, will create a database where companies can register phone numbers and addresses that have been used illegally.
By connecting the database to their systems, companies will be able to identify when an account is being created with a registered phone number and share that info with authorities.
The group will invite banks, eCommerce firms and other businesses to participate in the system to improve fraud detection efficiency. The report notes that this system is a sharp contrast to the U.S., where anti-money laundering measures are strictly enforced and information about fraud is compiled by law enforcement.
Read more: Merchants Face off Against Evolving Fraud Tactics
Earlier this year, PYMNTS looked at how the COVID-spurred digital acceleration has led to a spike in fraud in a conversation with Andre Machicao, SVP, global head of product and solutions at Cybersource.
“Fraudsters are becoming increasingly sophisticated with testing merchants’ systems to determine which ones are likely vulnerable or under-protected,” Machicao wrote. “Tactics like friendly fraud, card testing, phishing and identity theft are quickly becoming the leading means of attack in the midst of an accelerating shift toward digital.”
With the COVID-inspired growth in digital comments came an increase in fraud attempts and fraud rates by revenue for 75% of merchants around the world, with businesses in Asia-Pacific and enterprise and mid-market merchants impacted in particular.