If You’re in South Africa, Think Twice Before Approving App Payments

South African banks are warning customers to scrutinise payment requests on their banking apps as fraudsters increasingly trick users into authorising transactions themselves rather than attempting to hack bank accounts.

Discovery Bank says in a fraud alert that criminals can exploit a lost smartphone or bank card within minutes if customers do not act quickly.

“Always check payment and card purchase requests before approving them. Banks will never ask you to approve a reversal of a fraudulent transaction,” the bank has warned.

It urged customers who lose their phone or card to block the card immediately through their banking app, if possible, and contact the bank’s fraud team.

“If you have access to your banking app, block your card, then contact our fraud team straight away. Fraudsters can misuse lost cards and devices within minutes,” Discovery Bank added.

The warning comes as banks contend with a rise in so-called authorised push payment fraud, in which criminals persuade victims to approve transfers or card payments themselves.

Fraud prevention firm BioCatch said 85% of South African banking executives surveyed had seen an increase in fraud attempts against their institutions, while 79% reported rising fraud losses.

More than 81% estimated their institutions lose over $5 million (about 82 million rand) annually to fraud, according to the company’s research.

Jonathan Frost, BioCatch’s director of global advisory, said banks’ success in preventing unauthorised account takeovers had prompted criminals to target customers directly.

“I think we are facing a challenge, not just in South Africa, but in pretty much all of the developed markets,” Frost said.

“The banks have done such a good job at preventing unauthorised fraud that, unfortunately, customers have been put very solidly in the crosshairs of fraudsters.”

Rather than breaching bank systems, criminals increasingly rely on social engineering, persuading customers to approve payments or transfer money themselves.

“The security around bank accounts is generally so good now that the only way you can get the money out of the account is to effectively manipulate the customer into sending it on your behalf,” Frost added.

He warned the threat could intensify as fraudsters adopt artificial intelligence to create more convincing scams.

“It looks like it will probably worsen before it gets better. We’re now entering a new phase of an evolving threat environment.”

Banks are strengthening fraud detection systems in response.

Bonolo Sebolai, head of fraud at GoTymeBank, said banking security now extends beyond passwords and one-time PINs. She advised customers to download apps only from official app stores, end calls that appear suspicious and contact their bank directly, and act immediately if they believe their phone has been compromised.

The warnings follow a 73% increase in digital banking fraud complaints received by South Africa’s National Financial Ombud Scheme (NFO), with cases rising to 2,483 between January and May this year from 1,436 during the same period in 2024.

The NFO has also highlighted growing risks involving virtual bank cards after one customer lost 500,000 rand.

Lead Ombud for Banking and Credit Nerosha Maseti said virtual cards remain secure but can be abused if criminals first gain access to a customer’s banking app through phishing, smishing or vishing scams.

“Fraudsters can create virtual cards and then use the virtual card credentials to perform transactions once gaining access to a customer’s digital banking profile after customers have shared OTPs or approved authentication prompts,” he said.

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