How ACI Worldwide Plans to Take APP Scams Head-On

Real-time payments, or RTPs, and other forms of cashless transactions enable instant money transfers, offering convenience for both individuals and businesses. Cross-border RTPs alone now shift billions of dollars in remittance fees instantly. But fraudsters are exploiting the speed of these transactions, tricking millions of victims into parting with their savings through authorized push payment, or APP, scams. One way to contain this fraud is by embedding network intelligence into the messages associated with RTPs.

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Part 1 of a two-part feature on ACI Worldwide’s signals network intelligence technology, developed over the past seven years and now being positioned for open-source adoption by banks and financial institutions, explores the rising threat of APP scams in RTPs and the role of network intelligence in containing them.

An ACI Worldwide report titled “Real-Time Payments: Economic Impact and Financial Inclusion” shows an empirical link between RTPs and financial inclusion.

The report forecasts gross domestic product contributions from RTPs will increase from $164 billion in 2023 to $285.8 billion by 2028, a 74.2% increase over five years. By then, 167.2 million people, previously excluded from the financial system across 28 countries studied for financial inclusion, could have bank accounts.

The study, conducted across 40 countries, shows Pakistan and India at the top of a list of 10 countries identified for financial inclusion uplift. The report also predicts that aggregated net savings from RTPs for consumers and businesses will increase from $116.9 billion in 2023 to $245.8 billion by 2028.

ACI Worldwide secures the payments infrastructure for the world’s top 10 banks and more than 80,000 merchants. Widely regarded as an early innovator in global payments technology, the company supports a vast ecosystem that includes banks, fintechs, merchants, intermediaries, billers, acquirers, processors, networks, marketplaces, independent sales organizations and payment service providers. Each year, ACI processes 225 billion transactions and powers the artificial intelligence layer that detects and flags fraud for 6,000 customers across 94 countries.

The global payments technology company plays a key role in credential checks for card transactions, including authorization, authentication and fraud detection.

Ankur Saxena, senior director and head of sales for South Asia, UAE and Oman at ACI Worldwide, told Information Security Media Group that they have secured 78% to 80% market share in India, which is a strategic market for the company. This includes both public and private sectors banks.

“India’s largest public and private sector banks are using our payments fraud solution across 16 to 17 channels, to get a single view. This is a paradigm shift. We consolidate it so that they can take a decision based on the [risk] scoring,” Saxena said.

APP Fraud Surge

Payments intelligence was first used to identify fraudulent card transactions and money laundering. As the financial world adopted credit cards, debit cards and ATMs, the focus shifted to monitoring transactions and spotting unusual consumer behavior, such as spending patterns. With the rise of online transactions and e-commerce, it became essential to detect and block malware on websites. Later, cashless payment systems such as Brazil’s Pix and India’s UPI gained momentum during the COVID-19 pandemic, and the focus turned to monitoring APP fraud. In these scams, fraudsters pose as legitimate entities, such as banks, service providers or even government agencies.

APP scams depend on the victim voluntarily authorizing the payment, which requires scammers to be skilled at impersonation and making their outreach appear legitimate. Common examples include romance, investment and purchase scams. Because the victim initiates the transaction, reversing the payment is often difficult or impossible. And since these transactions are completed within seconds, the window to detect and stop the fraud is extremely limited.

An ACI fraud report reveals that APP fraud through RTPs is predicted to increase from 63% of all APP fraud losses in 2023-2024 to 80% by 2028.

Financial institutions have made huge investments in multifactor authentication, which has curbed financial fraud to a great extent. But these measures fall short in combating APP scams, where transactions are authorized by the legit account holder.

This raises many questions: How then can this menace be curbed? Is user awareness enough? What role can technology play here? What should governments and regulators be doing?

Regulators are starting to enforce stricter rules to hold banks accountable for scam-related losses and pushing financial institutions to adopt sophisticated monitoring systems that track both outgoing and incoming transactions.

The Smart Defense

To meet these challenges, spot trends and shut down scammers, banks must “fight fire with fire” by using AI to analyze transactional data, flag suspicious behaviors and facilitate real-time collaboration with other banks, Cleber Martins, head of payments intelligence and risk solutions at ACI Worldwide, told ISMG.

“Right after the Basel II [framework was published in 2004], banks warmed up to the idea of continuous monitoring to detect unusual behavior, especially against terrorism and financial crime. ACI at the time was partnering with a company called Nestor,” Martins said.

Martins said, between 1999 and 2001, he was privileged to work with Nestor’s co-founder Dr. Leon N. Cooper, a 1972 Nobel Prize winner in Physics. Cooper and his team developed neural networks to identify behavior, map behavior and point anomalies. The first commercial applications to use Nestor’s neural networks were used to monitor debit card transactions. “That was the beginning of what is now called transactional monitoring,” Martins said.

“The interesting part is that the founder of Nestor, Charles Elbaum, was working in a university along with the founder of a company that later became Fair Isaac Corporation. FICO and ACI were the only two companies in the market who were offering neural networks for transactional monitoring,” Martins said. “We were doing transactional monitoring using AI as early as 1999 to 2001. And we have a patent for this technology.”

Fast forward to 2025, this patented technology has evolved into network intelligence that can detect APP fraud in near real time.

Part 2 will focus on how ACI Worldwide’s technology is being deployed to combat fraud in practice.