The UK’s payment landscape is undergoing a rapid transformation. While regulatory initiatives, such as the mandatory authorized push payment (APP) reimbursement scheme, provide safeguards, sophisticated cyber-attacks and elaborate scams relentlessly evolve.
To reduce fraud, strong data-sharing frameworks and collaboration across the financial services industry are essential. Collaboration between big tech, telecoms, banks and the public sector can help combat fraud through a joined-up approach to data-sharing aimed at driving out scammers and identifying potentially fraudulent transactions.
Chief Policy and Engagement Officer at Pay.UK.
Current landscape
The scale of UK fraud is stark, with losses reaching £1.28 billion in 2025, a 4% increase year-on-year. Fraud is now operating on an industrial scale, with criminals using increasingly advanced tools and techniques to target victims. Fraud increasingly funds serious and organized crime in the UK and globally, reinforcing its status as a national security threat.
Authorized Push Payment (APP) fraud is a growing area of concern – this type of fraud continues to rise, with 248,070 cases recorded in 2025 (up 7%), showing that fraudsters are consistently adapting, pivoting to exploit new vulnerabilities, even as defenses strengthen. New scams have focused on investment, purchase-related, advance fee, invoice, and mandate scams as well as romance and impersonation scams.
Total losses from APP fraud rose sharply to £576.4 million (up 19%). This reflects a clear shift in criminal behavior, from exploiting systems to manipulating people through increasingly sophisticated social engineering.
Purchase scams made up 71% of all APP cases, demonstrating the scale and diversity of modern fraud tactics. This impact extends beyond financial loss, affecting individual livelihoods, disrupting businesses, and undermining national economic confidence.
Crucially, most APP fraud now originates outside the banking system. 66% of cases begin online (accounting for 32% of losses) and 17% via telecommunications networks, highlighting the growing role of digital platforms and telecoms in enabling fraud. Criminals are no longer primarily hacking systems; they are manipulating people, using sophisticated social engineering to bypass even the strongest technical controls.
Key considerations for the payments industry
Tackling these challenges requires a multi-faceted approach, combining robust technology, seamless collaboration to enable effective and compliant data-sharing, effective regulation, and public awareness. Key considerations are:
What does government strategy mean in practice?
Initiatives, such as the Government Fraud Strategy, provide an important framework for government, law enforcement, and the private sector. Infrastructure and data-sharing initiatives need to be effective, compliant, and aligned with national priorities to disrupt and prevent fraud. This ensures the fight against fraud remains a national priority that continuously adapts.
New data-sharing initiatives with Faster Payment System participants can play a key role here. Pay.UK’s work with participants on Enhanced Data Exchange (EDEx) will facilitate secure, timely data-sharing to empower financial institutions to detect and prevent fraudulent payments before they happen.
While still in development, its principles will complement the FCA’s APP fraud guidance and the Home Office’s Data Strategy ambitions: to enable secure, proportionate information exchange that helps prevent fraud before funds leave the system.
How can the industry continue to build cross-sector collaboration?
Cross-sector intelligence sharing and advanced data analytics are increasingly vital. Real-time, secure data exchange illuminates patterns, identifies emerging threats, and enables proactive intervention before attacks occur. When combined with strong governance and clear accountability, this kind of collaboration shifts fraud defense from isolated warning signs to a coordinated, system‑wide response.
Confirmation of Payee significantly reduces misdirected payments and various APP fraud types such as impersonation and invoice scams. It’s a vital, preventative layer of security before funds are transferred. It has implications beyond its intended purpose and has strongly influenced the development of Verification of Payee in Europe.
There is a growing call for greater enforceable responsibilities for technology platforms and telecommunications providers, not only to prevent fraud at source, but also to contribute financially and operationally to combating it.
How can the industry empower and educate end users?
Beyond technology and industry collaboration, fraud prevention has a vital human dimension. Educating and empowering end users remain central – recognizing the warning signs of a scam is still one of the strongest protections available. But education alone is not enough. Consumers also need better information at the moment a decision is made.
It’s encouraging to see that, as a payments community, we are already building richer data-sharing across the ecosystem to provide clearer, more relevant context when prompting customers to pause before making a payment. Banks are moving beyond generic warnings, providing genuinely useful guidance and strengthening the point of payment as a powerful, collective line of defense.
The APP reimbursement scheme is a significant consumer protection funded by UK banks. Data from the PSR shows that £215 million was reimbursed to victims of APP fraud in 2025 alone. Across the first 15 months of the scheme (October 2024 to December 2025), 89% of the money lost to APP scams has been successfully claimed back from a payment firm and returned to victims.
While not a direct comparison, this is a significant uptick from the 65% reimbursement rate reported by UK Finance for personal accounts in 2024. Providing a safety net of up to £85,000 for victims, this scheme offers a clear recovery mechanism and brings more consistency for customers than the previous voluntary Contingent Reimbursement Model (CRM) Code.
Further, the scheme continues to evolve in line with the shifting payment landscape. The PSR has appointed Frontier Economics to carry out an independent evaluation and review of the APP fraud policies, the results of which are due to be published in the second half of 2026.
These findings, which look at the current effectiveness of the policies, fraud performance reporting and the reimbursement requirement, will influence the future of APP fraud prevention strategies and regulatory requirements, ensuring the creation of safe and trusted payment infrastructure
The battle against payment fraud is ongoing, demanding constant vigilance and strategic adaptation. While the digital age has transformed how we transact, it has also presented fraudsters with new avenues for exploitation. Yet, as outlined, it is a battle we are actively and collectively winning.
By embracing a multi-faceted approach, combining robust technological defenses, seamless industry collaboration, effective regulatory frameworks, and comprehensive public awareness, we are building a formidable shield against these threats.
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