Fraud and scams have emerged as one of the most significant challenges facing the digital economy. What was once viewed primarily as a consumer protection issue has evolved into a broader threat to trust in financial systems, digital commerce, and economic participation. Policymakers around the world are increasingly recognizing that traditional approaches to fraud regulation are struggling to keep pace with the scale, sophistication, and speed of modern criminal activity. Crime is fought nationally, whilst criminals operate transnationally.
The challenge is not simply that fraud is increasing, it is that the nature of fraud has fundamentally changed. While the rapid digitalization of commerce, communications, and financial services has created unprecedented opportunities for innovation and inclusion, it has also enabled criminal networks to operate across platforms, industries, jurisdictions, and borders with remarkable speed and coordination. Criminals continuously adapt their tactics, leveraging social engineering, impersonation, phishing, spoofing, and emerging technologies to create increasingly convincing scams. Meanwhile, gaps in consumer awareness, institutional visibility, and regulatory coordination continue to be exploited.
As governments consider how best to respond, a growing international consensus is emerging around a simple proposition: fraud and scam prevention frameworks must evolve from fragmented, reactive approaches toward proactive, collaborative, ecosystem wide prevention-first models. Rather than focusing primarily on redress after harm has occurred, policymakers are increasingly exploring how legal and regulatory frameworks can identify and prevent fraud before funds leave an account. The irrevocable nature of instant payments makes this approach critical to maintaining trust in financial systems.
The Threat Has Outgrown Institution-by-Institution Defences
Modern scams are rarely confined to a single institution or sector. A scam can begin on a social media platform, move through telecommunications channels, involve multiple digital identities, and ultimately result in a payment or funds movement. The victim often experiences the scam as a single event. In reality, it is a chain of interconnected activities involving multiple participants across the digital ecosystem.
This evolution has been accelerated by several powerful trends.
First, scams have become increasingly multi-sector. Criminals routinely exploit the interaction between banks, telecommunications providers, digital platforms, payment systems, and merchants. No single participant or institution possesses complete visibility into the full fraud journey.
Second, scams operate in real time. Account-to-account payments and instant payment systems have delivered tremendous benefits for consumers and businesses. However, these same attributes mean that funds can often move faster than manual investigations, interventions, or recovery processes can respond. Once funds have moved through multiple accounts, the irrevocable nature of instant payments makes recovery considerably more difficult.
Third, criminal networks are highly coordinated. Fraudsters share infrastructure, tactics, and intelligence, adapting rapidly to exploit weaknesses wherever they appear. Scam “how-to guides” are available on the dark web, making them more accessible. Organized criminal groups increasingly operate across national boundaries and payment ecosystems, making enforcement alone an insufficient solution.
Finally, scams are increasingly cross-border. What may appear to be a domestic fraud event often has links to wider international criminal networks. This reality creates additional challenges for investigation, enforcement, and victim recovery challenges that will only exacerbate with the drive to make cross-border payments faster and more seamless.
These developments suggest that the challenge facing policymakers is not simply one of stronger enforcement. It is one of systemic design. If fraud occurs across an ecosystem, prevention measures must also operate across the ecosystem.
Criminals Move Across Sectors, While Regulation Remains Siloed
One of the defining tensions in fraud policy is the mismatch between how scams operate and how regulatory responsibilities are traditionally structured. Many jurisdictions continue to assign responsibility through separate regulatory frameworks governing financial institutions, telecommunications providers, digital platforms, consumer protection agencies, privacy regulators, and law enforcement bodies. While each plays an important role, fragmented oversight can create gaps that criminals exploit.
Several policy challenges emerge from this fragmentation.
The first is fragmented responsibility. When responsibilities are not clearly understood and aligned across the ecosystem, questions arise regarding who is best placed to prevent specific harms and who should be responsible when controls fail. Criminals exploit these gaps. Consumers become confused about who to report to and how when they fall victim to a scam, which can stop them reporting the scam as well as impacting their trust in the system.
The second is the lack of real-time information sharing. Effective scam prevention increasingly depends on timely access to centralised, understandable, and actionable intelligence across institutions and sectors. Financial institutions, digital platforms, telecommunications providers, regulators, and law enforcement agencies often possess different pieces of the puzzle. Yet legal, operational, technical, and governance barriers can prevent those pieces from being connected quickly enough to stop fraud before losses occur. For example, without a common “language” and agreed definitions, so-called intelligence is merely information.
The third challenge involves incentives and liability. When different actors bear differing levels of responsibility for prevention, the incentives to invest in controls may become uneven. Misaligned incentives can weaken accountability and reduce overall ecosystem resilience.
Finally, the pace of criminal innovation often exceeds the pace of regulatory adaptation. Fraudsters continuously refine their methods, learning from each other. Policy frameworks that are too prescriptive or inflexible may struggle to remain effective against rapidly changing threats and emerging technologies.
These issues are prompting governments around the world to reconsider whether sector-by-sector frameworks remain sufficient in an increasingly interconnected digital economy.
International Experience Provides Valuable Lessons
In response, a growing number of jurisdictions are pursuing collaborative, ecosystem wide prevention-first approaches to fraud and scam regulation.
At the heart of these frameworks is a shift in focus: from trying to recover losses after fraud has occurred to identifying and preventing scams before payments are executed. Prevention-first models seek to align incentives across the ecosystem, require proportionate intervention before harm occurs, and establish predictable outcomes when prevention measures fail. While jurisdictions have adopted different approaches, international developments point in a common direction.
Australia’s Scam Prevention Framework Act 2025 is regarded as one of the most comprehensive ecosystem-based models currently emerging globally. The framework brings together banking, telecommunications, and digital platforms under a common statutory architecture supported by sector-specific, enforceable rules. It establishes duties to prevent, detect, disrupt, report, and respond to scams while providing oversight and consumer redress mechanisms.
Other jurisdictions have adopted different entry points while pursuing similar objectives.
Singapore has focused on targeted intervention measures, including real-time surveillance tools, customer safeguards, and mechanisms to restrict suspicious transactions.
The European Union has emphasized technical safeguards, including mandatory verification of payee, for both instant and bulk payments, transaction monitoring, information sharing arrangements, and strong consumer protections.
The United Kingdom has implemented layered accountability models combining payment protections, mandatory reimbursement, and shared liability obligations between sending and receiving banks. Cross-sector liability is under active review to reflect the role that platforms and telcos play in scams.
Although these frameworks differ in structure, they share several common themes: collaboration, stronger accountability, real-time prevention controls, intelligence sharing, enforcement mechanisms, and clearer consumer protections.
The lesson for policymakers is not that any single model should be replicated wholesale. Rather, it is that a set of common principles is emerging across advanced economies facing similar fraud challenges.
Six Characteristics of Real-Time Payment Ecosystems with Strong Fraud and Scam Controls
International experience suggests several common characteristics are increasingly found in payment ecosystems that have been successful in managing fraud and scam risks. While implementation approaches vary across jurisdictions, these characteristics are generally principles-based, risk-based, and technology-neutral.
- Real-Time Controls: Strong fraud prevention is embedded directly into payment and customer interaction flows. Real-time monitoring, detection capabilities, account verification, and risk-based intervention mechanisms help identify and address suspicious activity before losses occur, balanced against consumer expectations of seamless, frictionless payment experiences.
- Cross-Sector Responsibility: Participants across the ecosystem understand and fulfill their respective roles in managing fraud and scam risks. Banks, telecommunications providers, and digital platforms each encounter different points of vulnerability and contribute according to their capabilities, responsibilities, and access to relevant risk indicators.
- Interoperable Intelligence: Effective fraud and scam prevention is supported by trusted mechanisms for the identification, definition, and exchange of relevant intelligence across organizations and sectors. Information can be exchanged securely, lawfully, and in a privacy-conscious manner to improve detection and response.
- Network-Level Resilience: Fraud prevention extends beyond individual institutions to the broader ecosystem. Network-level intelligence, coordinated detection capabilities, and collaboration among participants contribute to resilience across the payment system as a whole.
- Risk-Based Liability: Responsibility for fraud losses is allocated through transparent and proportionate frameworks that align with roles, responsibilities, and control effectiveness. Participants are incentivized to manage the risks they are best positioned to address.
- Predictable Consumer Redress: Consumers should be aware of and have easy access to clear, predictable processes for resolving disputes and redress pathways where appropriate. Defined timelines, transparent procedures, and consistent outcomes help maintain confidence in the payment system.
Advancing Fraud and Scam Resilience Through Network Intelligence and Collaboration
Mastercard brings decades of experience protecting its global payments network and has invested extensively in ecosystem collaboration, fraud detection, cybersecurity, identity, and intelligence capabilities that help safeguard billions of transactions each year.
We know that effective fraud and scam prevention requires a framework that addresses risks across the entire payment lifecycle. Mastercard’s fraud and scam capabilities are designed to support this objective through a layered Prevent–Detect–Recover approach. By combining identity verification, account verification, real-time transaction risk assessment, network and cyber-threat intelligence, coupled with standardized reporting processes and dispute management capabilities, Mastercard helps financial institutions identify potential scam activity before funds move, detect suspicious activity across the broader ecosystem, and support more effective remediation when fraud occurs.
A key strength of this approach is its use of network-wide intelligence to address threats that often extend beyond the visibility of any single institution. Real-time machine learning tools help identify potential authorized push payment scams before a payment is executed, alongside the detection of mule accounts, organized criminal networks, compromised credentials, and emerging scam typologies. Together with structured information sharing, investigation, dispute-management, and fund-recovery processes, these capabilities provide operational support for the Prevent–Detect–Recover principles that are increasingly emerging as international best practice for fraud and scam regulation in real-time payment systems.
Moving From Fragmented Remediation to Coordinated Prevention
As governments consider future reforms, the objective should not be to prescribe specific technologies or business models. Technologies evolve rapidly, and effective regulatory frameworks must remain flexible. Today’s scams are real-time, coordinated, multi-sector, and increasingly cross-border. They exploit gaps between institutions, sectors, and jurisdictions. As digital economies continue to grow, those gaps will become increasingly valuable targets for organized criminal networks.
A growing body of international experience demonstrates that a different approach is possible. Collaborative, ecosystem-wide prevention-first frameworks seek to shift the focus from helping victims after harm has occurred to preventing fraud before money is lost. They bring together prevention capabilities, shared responsibility, intelligence sharing, risk-based liability, and efficient consumer redress within a coherent policy architecture.
The opportunity for policymakers is clear. By aligning responsibilities across the ecosystem, enabling intelligence to move securely and effectively, and embedding prevention into the design of digital financial systems, governments can help move society from fragmented remediation toward coordinated prevention. Working together with industry partners like Mastercard with cutting-edge fraud and scam capabilities can deliver that prevention today. In doing so, they can strengthen consumer trust, protect the integrity of digital commerce, and build more resilient financial ecosystems for the future.
About Mastercard
Mastercard powers economies and empowers people in 200+ countries and territories worldwide. Together with our customers, we’re building a sustainable economy where everyone can prosper. We support a wide range of digital payments choices, making transactions secure, simple, smart and accessible. Our technology and innovation, partnerships and networks combine to deliver a unique set of products and services that help people, businesses and governments realize their greatest potential.
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