Ecommpay urges sector-wide push to stop fraud earlier

Ecommpay has published the second part of its fraud report on financial services and payments, arguing that fraud prevention requires broader cooperation across the payments sector.

The report, titled Beyond the Black Box - From diagnosis to action: transforming fraud prevention for a human-first world, outlines steps government, regulators, businesses and other stakeholders can take to reduce fraud. It follows an earlier instalment that examined the current fraud landscape and the growing role of human psychology in scams and payment crime.

The latest findings suggest a shift in where fraud prevention is breaking down. Rather than outdated technology being the main weakness, criminals are exploiting a combination of human behaviour, limited resources and regulatory complexity.

That assessment reflects a wider debate in payments over whether extra checks and customer friction can still counter changing fraud methods. Ecommpay argues that the current model is too fragmented to respond effectively to a crime that crosses borders and affects both businesses and consumers.

"The first part of our Fraud Report demonstrated how and why the current approach to fraud prevention is failing businesses and customers," said Willem Wellinghoff, chief compliance officer and UK chair at Ecommpay.

"Over the years, new tools and layers of friction have been added to onboarding and payment processes to tackle the shifting threat of fraud. However, this approach is no longer serving its purpose - more friction is not the answer. What we need is a fundamental shift in how the industry thinks, works and collaborates."

Pressure points

The report emphasises the limits of traditional fraud controls. It argues that the tools and frameworks used by many firms are no longer sufficient on their own to address newer forms of fraud, especially when criminals rely on social engineering and manipulation rather than direct technical intrusion.

In that context, transaction monitoring, artificial intelligence and regulation still have a role, but only as part of a more joined-up system. Businesses, regulators and government need to align their approaches more closely if they want to reduce losses and intervene earlier.

Wellinghoff expanded on that point in a further comment on the report's conclusions.

"Traditional fraud prevention tools and frameworks are not equipped to provide comprehensive protection against modern fraud techniques. Robust transaction monitoring, correctly employed AI and balanced regulation are all valuable elements in successful fraud prevention. But businesses, regulators and government must work collaboratively to consolidate approaches and reduce fraud. We must shift from a reactive approach of reimbursing victims after the fact to proactive fraud prevention at source."

Merchant steps

Alongside its broader recommendations for policymakers and the industry, the report includes practical actions for eCommerce merchants. These are intended to help businesses review their own defences while addressing the customer side of fraud risk.

The measures include discussing fraud prevention with payment providers, auditing internal systems, educating customers about fraud risks and training staff to identify suspicious activity. Ecommpay also calls on merchants to keep up with changes in the fraud landscape, watch for unauthorised use of their brand and report suspected fraudulent transactions to payment service providers.

This suggests the company sees fraud prevention as a shared operational task rather than a function that can be outsourced entirely to a single payments partner or software tool. It also points to growing concern across online commerce that attacks increasingly target trust, routine behaviour and weak links between businesses and consumers.

Broader debate

The publication adds to industry discussion about how to balance consumer protection with smooth payment journeys. Payments companies and merchants have long faced pressure to tighten controls, but they also risk creating barriers that deter legitimate customers if checks become too intrusive.

Ecommpay argues that this trade-off has become harder to manage because fraudsters are adapting faster than many existing control systems. In particular, the report suggests the sector must move beyond simply adding extra layers to account opening and payment flows if it wants to respond to more complex, psychologically driven fraud attempts.

Founded in London in 2012, the company operates in global and local acquiring, payment processing and orchestration. Its latest report centres on the view that fraud can no longer be treated as an isolated compliance issue for individual firms, but as a systemic problem requiring coordination across the market.

The report's central recommendation is that the sector should focus less on reimbursement after losses occur and more on stopping fraud before money leaves the system.