PayPal Taps Into AI To Help Stop Friends & Family Payment Fraud & Scams
PayPal introduces new AI-powered scam alerts in effort to help stop Friend and Family payment fraud.
The personal payment option is a popular choice for transferring money without paying fees, but that comes at the cost of little to no protection or refunds for unauthorized or fraudulent transactions - which is exactly what makes it also a popular choice for scammers, especially ones that originate through social media.
But now a new dynamic alert system for PayPal and Venmo hopes to draw user attention to potentially suspicious activity before funds are sent with interventions ranging from simple warning messages to automatically declining payments deemed highly risky.
A company press release described the new AI powered tool:
When building PayPal’s dynamic alert system, we 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 analyze billions of data points and update when patterns change. This means our system can help more quickly detect a potential new scam, even if we have 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. We continue to automatically decline payments that we detect as highly risky.
The move comes as PayPal is opening a new AI and Fraud Data Science Centre, bringing 100 new jobs to its Dublin, Ireland offices.
Brian O’Donovan
"As we shape the next generation of digital payments, the talent and innovation coming from Ireland will play a critical role," said Aaron J Webster, Global Chief Risk Officer at PayPal.
"This expansion reflects both our confidence in the local ecosystem and our ambition to build an AI-driven, data-powered future that embeds trust and safety in every transaction."
The new Friends and Family security alerts are live in all global markets in which PayPal operates, and across the US on Venmo.
