One of today's significant global challenges is AI-powered financial fraud—particularly Authorized Push Payment Fraud, where fraudsters trick victims into sending money by posing as legitimate recipients. To combat these threats, the industry is turning to artificial intelligence for timely fraud detection and prevention. This was explained to the DIGI PAY blog by Albena Petkova from the Financial Fraud Prevention Services at BORICA.

She explained that effective fraud prevention now requires risk analytics that focus on customer behavior across digital platforms such as mobile banking and digital wallets. AI can detect anomalies and unusual patterns before payments are initiated.

"There is no silver bullet in the fight against financial fraud. One should always consider a comprehensive approach to fraud prevention, tailored to the product and/or service in question," Petkova said. Currently, the financial sector's best practice involves automated systems that provide end-to-end monitoring of customers, transactions, and accounts—offering a complete view of customer behavior.

Financial Fraud in the Lead-up to Eurozone Entry

According to Petkova, this year the focus of financial institutions is on immediate payments and preparations for our entry into the euro zone. Accordingly, the requirements for beneficiary verification and prevention of financial fraud must comply with the new regulations.

Banks and fintech companies must quickly adapt to these changes by creating appropriate anti-fraud frameworks while meeting customer expectations for speed and convenience, Petkova emphasized.

According to her, it is important how PSD3 will be finalized and what the guidelines will be to strengthen the security of electronic payments and create space for better cooperation between banks and fintech companies.

"In 2025, card payment security must be a top priority for Bulgarian e-commerce merchants since customer trust is crucial for growth. The rising threat of online fraud requires implementing advanced technologies like 3D Secure 2.0, which provides an additional layer of transaction protection," Petkova explained to the DIGI PAY blog.

Security for users

Two-factor authentication is now considered a standard, not an add-on, and user expectations confirm this. Working with PCI DSS-compliant certified payment processors ensures the security of card data processing. Regular software updates and the implementation of advanced encryption are key to protecting sensitive information, the BORICA expert added. Educating all employees in an organization about online threats such as phishing and social engineering helps build an internal culture of security and is part of a broader financial fraud prevention framework. Monitoring user behavior helps identify suspicious transactions in a timely manner. "E-commerce merchants should have tools that automatically block fraud and suspicious behavior in real time," Petkova said. To be competitive, she says, online retailers need to implement solutions that combine high security with a seamless user experience. Good examples include dynamic authentication, real-time risk analysis, and secure payment platforms.

Three sectors to watch out for with online payments

Fintech and financial services companies must exercise particular caution with their payment processes. According to Petkova, regulators are pursuing a consistent policy that both expands the scope of regulated sectors and sets more detailed requirements for customer authentication, transaction monitoring, and financial fraud prevention responsibilities.

The second key sector to tread carefully when it comes to digital payments is e-commerce businesses. "Merchants will need to invest in dynamic fraud detection systems and automated mechanisms to block suspicious payments. The growth of buy-now, pay-later (BNPL) services is expected, which will require better analysis of customer creditworthiness on the one hand, and the ability to identify fake accounts on the other," says Petkova.

Another big sector that needs to be careful with online payments is tourism, she said. "Hotel bookings and airline tickets have traditionally been among the most targeted by cybercriminals through the use of stolen cards and fake disputed transactions," Petkova recalled. This will require more sophisticated customer verification systems, including ID verification and biometric checks. Risk-based authentication will become the key to preventing fraud in high-value purchases.