While most consumers have yet to buy or use cryptocurrencies, they are interested in and aware of cryptocurrencies, setting the stage for near-term growth as the technologies that support cryptocurrency transactions continue to mature. . Some consumers see cryptocurrencies as a promising new investment asset that could even be used as collateral for loans, while others are interested in cryptocurrencies due to the promise of increased security and privacy.
Despite this growing interest, most consumers do not understand cryptocurrencies very well, leaving them vulnerable to scams. Cryptocurrency fraud has added risks for consumers compared to other forms of electronic payment fraud as transactions cannot be reversed and even regulators have limited ability to track the parties involved in a transaction.
As a result, realizing the full potential of cryptocurrencies will require consumers, vendors, and regulators to work together to promote security and reliability in the space. in the last Digital Fraud TrackerยฎPYMNTS examines the steps being taken to make cryptocurrencies more secure and accessible to help drive mainstream adoption.
Developments in the world of digital fraud
An increase in both the number of reported scams and crypto-related inquiries at the UK's Financial Conduct Authority (FCA) shows the growing interest in cryptocurrencies among consumers and a growing awareness of the risks involved. Three thousand of the 16,400 possible scam reports submitted to the FCA between April and September of last year were related to cryptocurrencies. In that same period, use of the FCA's ScamSmart Warning List for inquiries related to cryptocurrency fraud increased 49% from the previous six-month period. The ScamSmart tool lists so-called investment opportunities that have been flagged as scams.
While concern about cryptocurrency scams may have increased among UK consumers, there has not been a concomitant rise in tolerance for overzealous fraud protections when conducting electronic transactions. Part of this may be related to consumers overestimating their ability to spot and avoid scams. Only 6% of UK consumers are concerned about authorized automatic payment fraud or being tricked into sending money to a scammer. At the same time, 19% said the biggest irritation is when their financial institution (FI) blocks a transaction they've authorized, and 35% said if an online transaction was declined three or more times, it would lead them to consider switching. Of supplier.
To learn more about these stories and other digital fraud developments, check out Tracker's news and trends section.
Wirex on the maturation of cryptocurrencies and risk management
From crypto-linked debit cards to stablecoin cryptocurrencies linked to existing fiat currency, technologies that enable the use of crypto as a trusted means of conducting everyday transactions are on the rise.
In this month's featured article, Tony Lees, Director of Crypto Platform Products Wirextalks about the unprecedented growth in cryptocurrency use cases that has accompanied efforts by providers and platforms to make them more accessible, as well as the misconceptions and fraud concerns that are keeping some consumers from engaging with cryptocurrencies. cryptocurrencies.
PYMNTS Intelligence: Addressing Cryptocurrency Risks as Interest Grows
Thirty-eight percent of consumers to believe that cryptocurrencies will be widely accepted for everyday transactions within the next 10 years, and 86% are at least aware of crypto. Still, only 16% have ever bought or committed to a cryptocurrency. As that latter number grows, a lack of familiarity with cryptocurrencies could greatly increase consumers' exposure to fraud. Most cryptocurrency scams take a form similar to other types of fraud, promising unrealistic gains or generally exploiting human rather than technological vulnerabilities.
This month's PYMNTS Intelligence looks at the role of providers, regulators, and consumers in ensuring that cryptocurrencies continue to mature as transactional currencies while mitigating the risk of fraud.
About the tracker
the Digital Fraud Trackerยฎ, made in collaboration with data viewer is your go-to monthly resource for updates on trends and changes in digital fraud prevention.
