• Frode Åsheim, EVP and CEO at Mastercard Payment Services


• 30.03.2022 02:45 pm
#Fraudulent #bill

Last summer, 45 million people in the UK were targeted by scam phone calls and text messages. This is a staggering number that not only impacts consumers but businesses like utility providers too, who are regularly the ones being impersonated by fraudsters. 

This ends up costing businesses as they try to find ways to keep their customers safe while also having to spend extra in chasing missed payments. When we spoke to billers they told us that half of the payments that need to be chased cost them between £150 to £350 each, with a further 39% costing them £350 to £1,000. Of course, the cost to customers is far greater with victims not only losing money but trust and confidence impacted. 

The pandemic has made this situation even more challenging for service providers. Over 80% of the billers we spoke to said that COVID-19 had impacted bill collection processes. Fraudsters also now regularly claim to be from the government or health organisations, exploiting people’s concerns about the virus in order to get them to divulge their personal details and willingly grant access to their finances. 

These scam texts and calls often claim the consumer has an unpaid bill and will pressure them to willingly transfer money out of their bank accounts to the fraudulent recipient, all under the guise that they are from a legitimate company. If they refuse, they are often threatened with legal or police action. This type of impersonation scam – a form of authorized push payment (APP) fraud - has been rising sharply. In the first half of 2021 there was a 71 per cent increase in APP fraud, overtaking card fraud for the first time, and costing victims over £350 million. Overall, fraud has risen by 24% during the pandemic. 

There is a clear desire from businesses to better protect their customers. Last year the Home Secretary relaunched the Joint Fraud Taskforce, bringing public and private sector organisations together to tackle this growing problem. Seeing industry and government leaders working to come up with new ways to protect the public is welcome. However, there are already technologies and services available which could be utilised to help stop fraudsters in their tracks. 

These types of fraud revolve around the victim being given account details and then being pressured to pay into or being convinced to divulge their own. So, what if we could remove this as a risk, while giving people greater certainty over who they are speaking to?

Launched last year, Pay.UK’s Request to Pay framework now allows billers and their customers to connect directly when sensitive information is being discussed, like bill payments, in a secure and closed ecosystem. The service removes uncertainties like the number someone is being called or texted from and instead organisations like utility providers can message customers directly through integrations with existing and trusted applications, such as mobile banking apps. Here, customers can see when bills are due and communicate directly to their provider about what they owe. Mastercard was the first to offer an end user application service within this framework.

For example, billers and customers can agree how they pay – whether that’s in full, in part, or request a delay – and the service can then translate the payment request into a credit transfer once the payer has approved and authenticated it, reducing the risk of fraud and error by allowing people to pay in a secure, trusted environment. This is far more secure than phone or text and gives consumers greater confidence of who they are speaking to, as well as greater flexibility over their bill payments.  

We know this service is something many want. We spoke to a range of people, including gig workers, those on both fixed and irregular incomes, as well as vulnerable payers and nearly 60% said they would be interested in receiving bills via chat on a mobile phone and the ability to pay them immediately and securely.

Those in the payments industry were equally keen. A third of those we surveyed said they were looking to expand or upgrade investment in secure messaging networks. As well as fraud detection, they recognised the benefits that Request to Pay could also bring to their customers in areas like data security, analytics, instant payments and error prevention.  Through Request to Pay, partners can offer these services at a lower cost than if they developed them themselves, while also benefiting from a choice of connectivity so it can fit into their existing processes efficiently.

There is a real opportunity here for service providers to give their customers not only an enhanced payment and billing service, but to also build trust and better protect them from the threat of fraud. With Request to Pay, we can help do that, providing financial organisations, utility companies and other billers with a better way of communicating with and billing their customers, all while making it harder for criminals to get their hands on people’s hard-earned savings.