In the lead-up to Safer Internet Day, global payments provider Adyen has shed light on the evolving payment fraud landscape in Singapore. With its high level of digital payments maturity, the country has witnessed shifting trends in fraudulent activities. Unlike its regional counterparts, where fraud types like triangulation fraud and account takeover fraud are more common, Singapore has seen a rise in more sophisticated and creative forms of fraud.
As fraudsters adapt to security measures and consumer awareness, it is crucial to examine the most prevalent fraud types, their impact on both consumers and businesses, and the measures necessary to counteract them.
The Most Widespread Payment Frauds in Singapore
Singapore’s consumers are relatively more aware of fraud risks compared to other regions, leading fraudsters to refine their methods. Below are the most common types of fraud found now.
Phishing continues to be one of the most prevalent scams affecting both consumers and businesses. This form of fraud involves deceptive tactics to steal personal information such as passwords and credit card numbers. Even in a highly secure payment environment with the widespread adoption of multi-factor authentication (3DS), phishing remains a major concern.

A more advanced consequence of phishing is synthetic identity fraud, where fraudsters combine legitimate and falsified personal identifiable information (PII) to create identities that appear genuine. These synthetic identities are then used to deceive retailers, making fraudulent transactions harder to detect.
Beyond professional fraudsters, everyday consumers also contribute to fraud by exploiting business refund policies. Policy abuse includes taking advantage of return policies, falsely claiming refunds, or manipulating promotional benefits.
Subscription-based businesses are particularly vulnerable, as fraudsters engage in promo abuse by repeatedly signing up for free trials and selling access at discounted rates. This type of fraud is increasingly common in the entertainment and digital goods sectors, where products are intangible and harder to track.
Another significant fraud trend in Singapore is card testing, where stolen credit card information is tested to verify its validity. Fraudsters use small transactions or sign up for free trials to check if a card is active. Once verified, these active cards are sold on the dark web for higher prices.
Friendly fraud, or first-party fraud, occurs when consumers dispute legitimate charges without valid reasons. This commonly happens with subscription-based services when consumers forget about recurring payments and request chargebacks. Instead of reaching out to merchants for refunds, they opt to dispute transactions through their banks.
Fear vs. Convenience
The Adyen Index: Retail Report 2024 reveals that fraud attempts have had a profound impact on consumer behaviour in Singapore.
Nearly half of Singaporean consumers (49%) have been victims of payment fraud. One in three (33%) feel less safe shopping today than they did a decade ago, a higher percentage than the global average (25%). About 29% of consumers prioritise shopping at stores with enhanced security measures, and 21% prefer retailers that require two-factor authentication (2FA).
Additionally, 31% of baby boomers prefer physical stores over online shopping due to fraud concerns. In contrast, 31% of Gen Z consumers prefer fast, seamless checkout experiences with minimal input requirements. More than half (53%) are willing to share personal data with retailers in exchange for discounts, highlighting the delicate balance between convenience and security expectations.

The Rising Cost of Payment Fraud
The increasing prevalence of fraud is also affecting businesses. The report highlights several key trends among Singaporean businesses.
About 52% of businesses reported a rise in fraud attempts over the past year, with 60% observing an increase in fraudulent activities during peak shopping seasons. Additionally, 66% are considering working with tech/payment providers that offer chargeback liability guarantees.
A significant 62% of businesses are using AI-driven fraud prevention technologies to enhance security. Approximately 63% of businesses operate in online marketplaces, with industries such as consumer electronics (77%) and luxury fashion (70%) leading the way.
Businesses are not only experiencing financial losses due to fraud but are also seeing reduced conversion rates due to stricter authentication requirements.
More than half (57%) of businesses report that strong customer authentication (SCA) and PSD2 regulations have led to lower conversion rates, though most agree that these measures are necessary for fraud prevention.

How Businesses and Consumers Can Protect Themselves
With fraudsters employing increasingly sophisticated tactics, businesses and consumers alike must take proactive steps to protect themselves.
For Businesses:
Implementing AI and machine learning tools can analyse transaction data, detect suspicious patterns, and flag high-risk transactions before they occur. Adopting multi-layered security protocols beyond two-factor authentication, such as tokenisation, encryption, and biometric authentication, can further strengthen security.
Using transaction velocity checks to monitor the frequency of transactions from a single source can help identify automated card testing activities. Enhancing customer education by warning them about common fraud tactics can reduce the likelihood of them falling victim to scams.
Strengthening chargeback management strategies by employing tools that track chargeback claims and differentiate between genuine disputes and fraudulent ones can help businesses mitigate losses.
For Consumers:
Staying vigilant against phishing attempts by avoiding suspicious links or sharing sensitive information via email, phone, or text messages is crucial. Enabling strong authentication methods such as two-factor authentication (2FA) and biometric security features can prevent unauthorized account access.
Monitoring account activity regularly and reviewing bank and credit card statements helps detect fraudulent transactions early. Shopping only on secure platforms and prioritising well-established, reputable sites that offer secure payment methods can reduce fraud risks.
Additionally, being cautious with subscription services by keeping track of recurring payments and setting reminders for subscription renewals can prevent accidental chargebacks.
The Future of Payment Fraud in Singapore
As Singapore continues to lead in digital payments innovation, fraud prevention strategies will need to evolve alongside emerging threats. Businesses must strike a balance between security and seamless customer experiences. Regulators, payment providers, and industry players must collaborate to create a safer digital commerce ecosystem.
By leveraging advanced fraud prevention technologies, strengthening authentication measures, and fostering consumer awareness, Singapore can continue to uphold its reputation as a secure and resilient digital payments hub.
However, vigilance remains key as fraudsters continuously refine their tactics, making collective efforts essential in the fight against payment fraud.
Featured image credit: Edited from Freepik