The Covid-19 pandemic has pushed digital payments to the forefront, but e-payment firm PayPal is warning that a host of financial crimes could soon spike as business transactions shift online.
It was not so long ago when a cyber heist gripped the world when millions of dollars were stolen by hackers via the SWIFT network from the Federal Reserve Bank of New York account belonging to Bangladesh Bank, the central bank of Bangladesh. Five of the thirty-five fraudulent instructions were successful in transferring $101 million, with $81 million finding their way to the Philippines.
Just recently, the Philippines was again implicated – albeit falsely this time – in the Wirecard scandal in which the German payments processor admitted 1.9 billion euros were missing from its accounts.
A study revealed that when laid out in relationship to the world’s GDP or gross domestic product, around 2% to 5% or amounting to $1 to $2 trillion can be tied to illegal money laundering. In a survey by consulting firm PriceWaterhouseCoopers, half of the 700 respondents positively confirmed that they have been victims of fraudulent financial or economic crimes.
As these crimes become more pervasive, PayPal said a more thoughtful and collaborative approach is needed as a way to move forward when considering the increase of speed and multi-faceted opportunities and risks. Companies and consumers, it said, should be able to adequately identify the risks before making their financial transactions.
PayPal said the key to this is an environment where regulators, the industry, and law enforcement are working in conjunction with each other. Because financial crimes are complex, strategic partnerships between the financial and technology sectors are also needed, it added.
Thus, PayPal said it has abandoned the traditional but outdated go-it-alone model and shifted to an approach that is more collaborative and inclusive, as evident in more than 40 partnerships with banks, card networks, and innovators in financial technology.
In a more recent attempt to increase usage and penetrate more markets, PayPal said it rolled out a new checkout technology in the form of the QR code payment functionality in 28 markets, omitting the need for entering a PIN or physically touching a POS terminal.
John Kunze, senior vice president for PayPal’s branded experiences department, said the rollout of the QR code payment feature for both buyers and sellers does not only offer security and convenience, but also takes into consideration the social distancing requirements across many countries, even with some restrictions already being lifted.