PhonePe’s Guardrails: Real-Time Fraud Detection

PhonePe is dedicated to ensuring safe digital payments for millions of Indians through its Trust & Safety initiatives. The team made up of experts like decision scientists, investigators, engineers and product managers, works across the country to monitor and detect fraud in real time. 

They look out for any unusual transaction patterns at the user or category level to prevent misuse. PhonePe's Trust & Safety team focuses on protecting transactions, data and user privacy.

Use of Technology to process transactions in real time 

PhonePe uses technology developed in India to create risk profiles for over 590 million users and 40 million merchants. These profiles help detect fraud in real time by analyzing over 310 million transactions daily. All this happens in milliseconds during transactions, ensuring user data remains private and safe.

They follow strict internal and external security checks, including encryption and physical security measures, to protect your information. 

They database is stored securely on firewalled servers with limited access. They only keep information for a set period, in line with legal and regulatory requirements.

PhonePe fraud detection engine looks for signals like customer details, behavior patterns, and past transactions to identify fraud. This includes:

• Connected Intelligence: Creates a network map to track user interactions and behavior.
• Action Intelligence: Tracks device usage, transaction frequency, and user activity in real time.
• Profile Intelligence: Evaluates real-time risk profiles of both the sender and receiver, as well as payment risk.
• Additional Attributes: Uses behavioral biometrics to detect anomalies, such as unusual typing or login attempts from new devices, helping prevent fraud or prompting for extra authentication.

Partnerships with law enforcement agencies 

PhonePe works closely with cybercrime cells from law enforcement agencies (LEAs) across the country. They regularly hold sessions to share the latest fraud trends and discuss ways to reduce fraud together. They were the first in the industry to launch a cyber-cell portal for LEAs, allowing them to verify and submit requests automatically, available 24/7, to help law enforcement access real-time information.

This collaboration ensures consumers are protected by providing LEAs with relevant and timely details to take action against criminals. It also helps resolve complaints faster. They maintain a list of known fraudulent users and share it with government authorities.

To protect consumers, PhonePe refunds money to victims’ accounts if the funds are available. If not they advise customers to seek help from LEAs and their banks for recovery.

User education

PhonePe believes that to make digital payments safe, easy, and accessible for all Indians, it's important to educate customers about fraud and how it can happen. Along with investing in advanced technology, PhonePe aims to help users identify and deal with fraud through ongoing outreach and education.

Their regularly updated trust and safety blog provides information on new fraud trends, how users can spot them, and where to get help. PhonePe shared details on several common and emerging types of fraud, including:

• Aadhaar Card fraud
• Fake PhonePe
• Fake apps
• Online trading scams
• Lottery scams
• Electricity scams
• Fake payment screenshots
• SMS spoofing frauds
• Social media impersonation
• Loan scams
• Cashback frauds

This is the second article in a four-part series on PhonePe’s commitment to securing digital payments for millions of Indians.

In the next post, we’ll explore some special features PhonePe has created to tackle new security challenges. These features help us warn users in advance and provide the highest levels of security.