Online payment system PayPal is enhancing its customers’ protection with the launch of a new AI-powered, dynamic scam detection feature.
Created for PayPal and Venmo Friends and Family payments, the new launch is designed to proactively alert customers to potential scams and prevent losses in real-time. The alerts intervene when it matters most – before any funds are sent. As scammers attempt to coerce people into sending payments that may not be eligible for refunds, including scams that originate on social media, PayPal is putting more information directly into customers’ hands, which will empower them to help stop scams in their tracks.
PayPal’s approach to addressing fraud is multi-pronged, comprising building innovative technologies, leveraging investigative research led by its team of experts, and refining its risk controls to help prevent bad actors from accessing its platforms. Given fraudsters frequently change their methods to try to evade detection, staying ahead of the latest trends and continually enhancing its tools are critical aspects of PayPal’s efforts.
Behind the alert system
When building its dynamic alert system, PayPal focused on both effective fraud mitigation strategies as well as enhancing the user experience. The alerts pop up when the system detects a potential scam, sharing critical and relevant information about the likelihood of fraud right at the point of payment. To help stay ahead of the curve, the alerts learn and adapt to evolving scam tactics.
PayPal’s system leverages continually learning AI models that quickly analyse billions of data points and update when patterns change. This means the system can help more quickly detect a potential new scam, even if it has never seen that specific scam before.
Unlike traditional, one-size-fits-all static warnings, PayPal’s alerts are dynamic and tailored to be shown based on the likelihood of fraud for each transaction. The system shares messages that appropriately reflect the risk level of the payment customers are trying to make. It also sends progressively stricter alerts as its confidence that a scam exists grows and adds more friction into completing payments for higher-risk scenarios.
The alerts are live in all global markets in which PayPal operates, and across the US on Venmo.
