Fraud is top of mind in tech — especially in payments — and not just because of the collapse of crypto trading firm FTX.
FinTechs promise to disrupt traditional financial services and through digital conduits at scale, also seek to speed up money movement, in real time, across a range of seamless, streamlined customer experiences.
But along with the promise lies some peril. These digital upstarts are increasingly in fraudsters’ crosshairs, and the bad actors are getting away with huge sums of money.
In the report “The FinTech Fraud Ripple Effect,” done in collaboration between PYMNTS and Ingo Money, we found that the average U.S. FinTech loses $51 million to fraud every year, or about 1.7% of its total revenue.
That’s an average. The impact is even more keenly felt by smaller FinTechs, as small firms lose 57% more revenue to fraud than large firms, with the average small firm losing 2.2% of its annual revenue to losses incurred by fraud.
Twice the Friction
Fraud can and does have knock-on effects well beyond a diminished top line — diminishing the…