Fraud as a service: Scammers are using encrypted messaging to undercut BNPL revenue

Buy now, pay later is gaining popularity among the traditional credit-wary Gen Z consumer population. With $680 billion in transaction volume up for grabs, financial institutions are jumping into the mix with their own offerings.

Rapid growth leads to new challenges.

The recent Consumer Financial Protection Bureau probe into vendors of financial products is the sector's biggest headwind, but there is another area that regulators and industry players should be concerned about. Cybercrime is a good indicator of economic trends, and as the market continues to grow, fraudsters are cashing in.

Rather than relegating their activities to dark web marketplaces, they are hiding in plain sight. They use publicly available forums on these platforms to work on 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 networks.

Anyone with an internet connection can participate in payment fraud. Rather than hoping that platforms remove the fraud forums from their services, the merchants who use them can shore up their own properties by understanding how they are at risk.

How can providers protect against new fraud methods? Let's dive in.

The dark web versus the deep web: The rise of fraud as a service

The dark web has been home to a lot of crime over the years and has become a place where people look to get information. Cybercriminals have turned to new and under the radar hubs to commit illegal activity after the recent raid on dark web marketplaces.

Malign actors want to use Telegram to conduct their illegal activity. secure messaging apps are a place for professional criminals to stay anonymous because they aren't found by search engines.

Fraudsters have changed their attack strategies. Rather than buying and selling access to information, criminals are now promoting fraud as a service.

A Telegram scheme in which criminals steal from restaurants and food delivery services is an example. By advertising their ability to purchase food and beverage orders with stolen information, they offer diners a heavily discounted meal.