Buy now, pay later (BNPL) is booming in popularity, particularly among the traditional credit-wary millennial and Gen Z consumer populations. With $680 billion in transaction volume by 2025 up for grabs, fintech startups and long-standing financial institutions alike are jumping into the mix with their own offerings.
But, as we’ve seen with other emerging tech trends, rapid growth leads to new challenges.
While many industry pundits would point to the recent Consumer Financial Protection Bureau (CFPB) probe into BNPL vendors as the sector’s biggest headwind, there’s another area that regulators and industry players should be concerned about: fraud. Cybercrime often acts as a barometer of economic trends, and as the BNPL market continues to soar, fraudsters are cashing in.
Rather than relegating their activities to dark web marketplaces, scammers are hiding in plain sight on encrypted messaging apps. They collaborate through publicly available forums on these platforms to target BNPL providers with new tactics.
The only way to get ahead of these scams is for BNPL vendors to ensure they have the right defense strategy in place to combat fraud on their own platforms and…
