Payment Fraud Surges 25% as Criminals Exploit Network Weaknesses

Payment fraud has increased by around 25% according to a recent analysis by Fraudio. The report highlights new challenges in detecting and preventing fraudulent activity across digital transactions. Fraudio’s data reveals that fraud is shifting towards network-level attacks. Over 90% of observed fraud events involved shared infrastructure, such as IPs linked to multiple cards. Repeated entities across the payment ecosystem also produced the strongest fraud signals.

Transactions using 3DS authentication still showed fraud activity, proving that authentication alone is insufficient. The report warns that layered prevention is now necessary to combat evolving threats.

Submerchant transactions had a higher fraud rate than direct merchant payments. Layered commerce models, where visibility across merchants and payment flows is reduced, carried greater risk. This lack of transparency makes fraud harder to detect.

Fraudio also noted a rise in customer friction due to increased false positives. Its false-positive proxy grew, indicating that legitimate customers are being incorrectly flagged by overly strict fraud controls. The findings suggest fraudsters are exploiting shared infrastructure and network vulnerabilities. Authentication tools like 3DS are no longer enough on their own. Businesses may need to adjust their fraud prevention strategies to reduce false positives while targeting emerging risks.