PayPal, the global digital payments platform known for enabling secure financial transactions, has launched a new AI-powered scam alert system designed to protect users making Friends and Family payments via PayPal and Venmo.
The introduction of this new product comes as scams increasingly target users sending peer-to-peer payments, especially through social media. Many of these scams involve fraudsters persuading users to send payments that fall outside refund eligibility. In response, PayPal is aiming to stop fraud before money changes hands by alerting users in real-time.
Founded in 1998, PayPal is a leading FinTech company that facilitates digital payments for consumers and merchants worldwide. Its platforms, including Venmo, are widely used for sending money, paying for goods and services, and managing online transactions securely.
The new scam alert system uses dynamic artificial intelligence to detect suspicious behaviour and flag potentially fraudulent payments before they’re completed. If a potential scam is identified, a warning appears during the transaction process, providing users with timely and actionable information.
Unlike static warnings, these alerts are tailored to each transaction and escalate in severity depending on the AI’s confidence that a scam is involved. In higher-risk situations, the system introduces friction to the process or may even automatically decline the payment to prevent financial loss.
PayPal’s AI model draws on billions of data points and constantly adapts to new scam tactics, offering a flexible and evolving defence against fraud. This proactive system is now available across all PayPal global markets and within the U.S. for Venmo users.
The company emphasised that combating fraud is a multi-pronged strategy involving technological innovation, expert-led research, and advanced risk controls. It also includes shutting down fraudulent accounts and stopping suspicious activity to enhance user protection.
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