Artificial intelligence is becoming more common in electronic payments

Prof. Tran Hung Son, director of the Institute of Development and Application of Banking Technology at Vietnam National University in Ho Chi Minh City, expressed concern that Vietnam is among the countries most affected by digital payment fraud.

Artificial intelligence is becoming more common in electronic payments, illustrative photo/Source: freepik.com

“Vietnam’s digital fraud loss rate is 3.6% of GDP, significantly higher than the global average of 1.1% and surpassing countries like Brazil and Thailand, which have a rate of 3.2%,” he noted during a digital payments seminar in Ho Chi Minh City in June.

By contrast, many developed countries report much lower loss rates, such as Belgium and Ireland (0.1%) and the Netherlands (0.2%).

Major General Nguyen Van Giang, deputy director of the Cybersecurity and High-Tech Crime Prevention Department at the Ministry of Public Security, said that in 2023, the Vietnam Information Security Warning Portal recorded about 13,900 cyberattacks on various agencies and organizations and nearly 16,000 reports of online fraud, causing losses exceeding $16.25 billion.

“Of this amount, individuals were scammed for between $333 million and $417 million, an increase of 50 percent compared to 2022. Up to 75 percent of mobile and social media users have received fake messages or calls,” Giang said.

He admitted that despite strict measures to prevent and combat high-tech crimes, challenges still exist. “The anonymity of online activities and cross-border operations that exploit legal loopholes complicate the tracking and handling of these crimes,” Giang explained. “Fraudsters operate in organized groups, creating complex schemes and meticulously exploiting technology.”

According to Giang, five common fraud methods have been identified: fraud via telecommunications services; fraud in the financial and banking sector; fraud via social media; fraudulent investment solicitations; and recruitment scams on e-commerce platforms such as Shopee, Lazada and Tiki.

On the other hand, Ngo Tuan Anh, director of SCS Network Company, believes that the proactive measure being implemented in this case is biometric authentication for money transfers above $415 per transaction or $830 in total per day. It is set to take effect on July 1, in accordance with the December 2023 regulation on the implementation of methods for ensuring secure online payments and bank card payments by the State Bank of Vietnam (SBV).

Anh said: “Online fraud typically involves criminals obtaining victims’ personal information and using disposable SIM cards. Facial authentication for money transfers will be an effective solution to prevent criminals from using borrowed accounts to transfer money.”

It also recommended improving the management of registered SIM cards and protecting personal data in order to effectively combat fraud.

On the banking side, Pham Chau Loan, deputy head of Vietcombank’s Digital Channel and Partnership Development Department, revealed that the bank is actively implementing biometric solutions to ensure transaction security. “Biometric customer authentication guarantees the accuracy and reliability of data without making it difficult to use,” she said.

Similarly, ACB CEO Tu Tien Phat reported that their facial authentication system has received positive feedback from customers.

“In just three days of implementation, 30,000 customers completed the facial authentication process, with each process taking less than 30 seconds,” Phat added.

Dang Tuyet Dung, Visa Country Manager for Vietnam and Laos, revealed that Visa has invested over $416 million in AI-based solutions to prevent fraud and increase security awareness.

“Visa also uses tokenization technology to encrypt transactions, removing private cardholder information from the payment flow and increasing security. We are working with banks and partners to implement data-driven authentication methods for e-commerce transactions, following trends in developed markets such as Singapore and Malaysia,” she explained.

Discussing customer authentication processes, Nguyen Dang Hung, Deputy General Manager of Vietnam National Payment Corporation, explained that previously banks relied on one-time passwords for authentication, with some requiring additional levels of verification depending on risk appetite.

“These layers of authentication directly impact a seamless customer experience,” he noted. “The 3D Secure authentication solution for domestic cards aims to balance security, protection, and convenience for customers. The solution supports modern biometric authentication methods such as fingerprints and facial recognition, and uses AI-based risk assessment to adjust additional verification requirements, reducing the risk of fraud in online transactions.”

By exchanging larger volumes of transaction data than before, banks can now access information about devices, transaction locations and transaction values. This allows them to analyze and assess risk based on historical data, thus making informed decisions about the right method for customer authentication, ultimately providing a better payment experience, Hung said.

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