Addressing the Increasing Challenge of Payment and Identity Theft Fraud in Egypt: Strategies for Prevention

According to a study released by Visa in September 2023 states that 91 Percent of Egyptian credit and debit cardholders are exposed to the risk of becoming victims of fraud through online and phone call scams.

With the increasing technological advancement in the Egyptian Financial and Banking Sector, it becomes so urging for financial institutions to adopt new preventive measures to mitigate Fraud, since fraudulent activities are no longer limited to Banked Users, they also include a new sector of FinTech Startups and their card consumers who are also exposed to the same risk of these suspicious acts.

Before proceeding forward, I would like to draw attention to be fully aware of that.

• Fraud is a Type of Risk, but not all Risks are Fraud.

What is the difference between Payment and Identity Theft Fraud?

A) Payment Fraud:

• Rise in online payments, such as phishing scams and stolen card information used for e-commerce transactions
• The emergence of mobile payment fraud, with criminals targeting mobile wallets and peer-to-peer payment apps

B) Identity Theft Fraud:

• Unauthorized access to personal information, such as national ID numbers, addresses, and financial details.
• Misuse of identity information to open fraudulent bank accounts, Account Takeover, apply for loans, or make unauthorized purchases.
• Increasing prevalence of synthetic identity fraud, where criminals create new identities using a mix of real and fake information.

How to Tackle these growing issues and mitigate the Risk of Fraud?

The Strategies for prevention should include tips for the cardholders, as well as the preventive measures and precautions that should be implemented by Financial Institutions.

I. For Cardholders:

• Ignore emails from senders you don’t know
• Make sure your bank has your updated contact details
• Sensitive account information should never be stored on your mobile device
• Monitor card and account statements frequently
• Cancel all inactive accounts
• Report missing cards immediately
• Don’t feel obligated to provide card numbers by phone

II. Tackling these issues by the Financial Institutions:

Egyptian financial institutions have taken significant steps to strengthen their fraud prevention capabilities. Banks have implemented a range of security measures, such as multi-factor authentication, advanced encryption technologies, and transaction monitoring systems. The objective of these measures is to protect customer data, identify suspicious activities, and prevent unauthorized access to accounts.

Furthermore, regulatory authorities like the Central Bank of Egypt (CBE) have introduced guidelines and frameworks to bolster the security infrastructure of financial institutions. These regulations require compliance with security standards and promote the adoption of advanced technologies to mitigate fraud-related risks.

Strategic Approaches to Enhance Fraud Prevention

1- Strengthening Payment Security:

• Implementing chip-and-PIN technology for credit/debit cards
• Enhancing security measures at ATMs and Point-of-Sale terminals, such as regular inspections and anti-skimming devices
• Promoting the use of secure online payment gateways and mobile payment apps with robust authentication protocols

2- Improving Identity Management:

• Implementing robust identity verification processes for new account openings and transactions
• Enhancing data protection measures to prevent unauthorized access to personal information
• Educating the public on best practices for safeguarding their personal and financial information

3- Fostering Collaboration and Information Sharing:

• Encouraging cooperation between financial institutions, law enforcement, and regulatory bodies to share information and coordinate efforts
• Establishing a centralized fraud monitoring and reporting system to identify emerging trends and respond effectively

4- Increasing Awareness and Education:

• Launching public awareness campaigns to educate consumers on fraud prevention techniques
• Providing training and resources for businesses and financial institutions to recognize and mitigate fraud risks.

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Ibrahem Hassan

Fraud and Risk Senior Analyst

Masria Digital Payments