Dong Nai enhances security in cashless transactions.

Bank employees in the province guide people on using cashless payment services and digital banking applications at the Dong Nai Digital Transformation Week 2023. Photo: H. Quan

However, alongside this development, cashless payment activities also pose many risks and dangers related to security and fraud, especially in the context of increasingly advanced technology and sophisticated methods used by high-tech criminals. This necessitates the development of a cashless society that is both secure and protected.

Many scams are becoming increasingly sophisticated.

In mid-June 2024, the Payment Department, the Communications Department (State Bank of Vietnam - SBV), Tuoi Tre Newspaper, in coordination with Napas National Payment Joint Stock Company and the Ho Chi Minh City Department of Industry and Trade, organized a workshop on enhancing security and safety of cashless transactions.

At the seminar, Mr. Pham Anh Tuan, Director of the Payment Department (State Bank of Vietnam), stated that in recent times, cashless payment activities have developed strongly with over 182 million individual customer payment accounts, corresponding to more than 87% of adults having bank accounts. In particular, the number of payment transactions via mobile and QR code channels has grown rapidly.

However, alongside this development, the banking industry also faces security risks and challenges with many sophisticated tactics such as: impersonating agencies and organizations, defrauding customers of login and transaction authentication information, luring customers to access fake links, installing malware, etc.

Major General Nguyen Van Giang, Deputy Director of the Cyber Security and High-Tech Crime Prevention Department, Ministry of Public Security (A05), stated that high-tech crimes are becoming increasingly complex, with connections between domestic and foreign individuals.

In recent times, despite continuous warnings from authorities and the implementation of many drastic measures, many people still fall victim to online fraud. The main reason is that organized, cross-border online fraud groups exploit legal loopholes.

In 2023, the Vietnam Information Security Warning Portal recorded approximately 13,900 cyberattacks on agencies, organizations, and businesses. Nearly 16,000 reports of online fraud were received, causing losses exceeding 390 trillion VND (equivalent to 3.6% of GDP).

According to statistics from the Ministry of Public Security and the Ministry of Information and Communications, there are currently three main types of fraud (brand impersonation, account hijacking, and other combined forms) with 24 fraudulent schemes.

Associate Professor Tran Hung Son, Director of the Institute for Banking Technology Development Research at the Vietnam National University Ho Chi Minh City, cited data showing that Vietnam is among the countries most severely affected by digital payment fraud. Specifically, the rate of losses caused by digital payment fraud in Vietnam reached 3.6% of GDP, higher than the global average (1.1%). Common forms of digital payment fraud in Vietnam include: cyberattacks (malware, phishing, man-in-the-middle attacks), impersonation, non-technical fraud, abuse of refund policies, first-party fraud, etc.

Implementing various solutions to protect customers and citizens.

To combat the increasing number of digital frauds, banks, businesses, and credit institutions need to implement a comprehensive set of solutions… Mr. Pham Anh Tuan added that the State Bank of Vietnam (SBV) issued Decision No. 2345/QD-NHNN in 2023 (referred to as Decision No. 2345). Accordingly, from July 1st, the SBV requires credit institutions and payment intermediaries to use biometric authentication for money transfer transactions of 10 million VND or more, or for total daily transactions exceeding 20 million VND. The customer's face must match the face stored in the chip of the citizen identification card.

Regarding Decision No. 2345, Deputy Governor of the State Bank of Vietnam Pham Tien Dung further analyzed that if we unfortunately lose customer information, criminals could take over the device. However, with the application of Decision 2345, when transactions require face matching and authentication, criminals cannot compare the face on the original records. Therefore, criminals cannot steal the money.

A crucial aspect of information theft is that criminals often install the software on other devices to carry out the theft. However, banks require biometric authentication. Therefore, criminals cannot install the software on other devices to steal money. On the other hand, experts analyze that during normal transactions, neither the account renter nor the account lender can use the transaction account.

The A05 Department issued several recommendations to help people raise their awareness and protect themselves from fraudulent activities, such as: thoroughly researching and verifying information before conducting transactions; not borrowing money online from applications of unknown origin; not transferring money, providing personal information, OTP codes, e-banking accounts, or downloading applications/links/emails at the request of strangers; absolutely not buying, selling, exchanging, renting, or lending payment accounts, bank cards, or personal identification documents; people should set up two-factor authentication and limit sharing personal information of themselves, their family, and friends online…

In addition, many experts believe that disseminating knowledge about security to users is also very important in preventing fraud, as mobile applications are increasingly becoming a favorite target for criminals.

Associate Professor Tran Hung Son proposed solutions for sharing fraud information among relevant parties in digital and online payments. Specifically, payment service providers need to proactively cooperate and share fraud databases, while also agreeing on common processing procedures. Improving the digital identification system will also significantly contribute to fraud prevention in payments.

Furthermore, the development of new forms of digital payment also poses a challenge to security. Therefore, regulatory authorities need to proactively build a legal framework to keep pace with the rapid development of digital payments and prevent fraud risks.

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