Global BNPL Fraud Prevention Market Size, Share, Statistics Analysis Report By Offering (Solutions (Identity Verification Solutions, Transaction Monitoring Solutions, Machine Learning and AI Solutions, Others), Services (Consulting Services, Implementation and Integration Services, Maintenance and Support Services), By Deployment Models (Cloud-Based Deployment, On-Premise Deployment), By Application (New Account Abuse, Synthetic Identity Fraud, Account Takeovers (ATOs), Fraudulent Chargebacks , Transaction Laundering, Others (Never-Pays Fraud, Trojan Horse Fraud, etc.)), Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2025-2034

Report Overview

The Global BNPL Fraud Prevention Market size is expected to be worth around USD 25.9 Billion By 2034, from USD 3.7 Billion in 2024, growing at a CAGR of 21.50% during the forecast period from 2025 to 2034. In 2024, North America led the BNPL Fraud Prevention Market with over 40.6% share and revenues of approximately USD 1.5 billion. The U.S. market was valued at USD 1.20 billion and is projected to grow at a CAGR of 19.4%.

Buy Now, Pay Later (BNPL) fraud prevention is an essential aspect of managing financial transactions in the ecommerce space, where consumers opt to purchase goods immediately and pay for them over time. This payment option, although convenient, opens up various avenues for fraudulent activities such as identity theft, account takeover, and payment defaults.

The BNPL fraud prevention market is experiencing rapid growth, driven by the increasing adoption of BNPL services worldwide. As e-commerce expands and more consumers opt for flexible payment solutions, the demand for robust fraud prevention solutions escalates. This market is supported by the development of sophisticated algorithms and machine learning models that enhance the ability to detect and prevent fraudulent transactions in real-time.

Key drivers of the BNPL fraud prevention market include the surge in online shopping, the rising popularity of BNPL financing options among consumers, and the heightened threat of digital fraud. Additionally, the financial and reputational risks associated with BNPL fraud compel businesses to invest in sophisticated fraud prevention tools that can provide real-time protection and adapt to evolving fraudster tactics​.

Based on data from TrustStamp, fraud in the Buy Now, Pay Later (BNPL) sector has reached alarming levels, posing significant risks to consumers and businesses alike. 23% of U.S. consumers who experienced application fraud in 2021 had their personal information exploited to open fraudulent BNPL accounts.

One of the most concerning forms of BNPL fraud is Account Takeover (ATO), which remains the most common method used by fraudsters. ATO victims often remain unaware of the fraud for weeks due to the delayed nature of BNPL payments, making detection and resolution more difficult.

Additionally, synthetic identity fraud is becoming a major challenge, as fraudsters create fake identities that can easily bypass security measures like two-factor authentication. With 55.8% of Americans using BNPL services, approximately 181 million people are at risk, especially when 45% of users reuse passwords across multiple platforms – making them particularly vulnerable to credential-stuffing attacks.

Buy Now, Pay Later (BNPL) fraud is surging, with 23% of U.S. consumers who experienced application fraud in 2021 having their data exploited to open fraudulent BNPL accounts, according to PYMNTS. A key vulnerability? Poor password hygiene.

Shockingly, 45% of BNPL users admit to using the same login credentials across multiple accounts, making it easier for fraudsters to hijack identities and create fake profiles. The problem runs deeper – 22% of consumers unknowingly signed up for fraudulent BNPL accounts, while 20% suffered account takeovers.

Key Takeaways

• The BNPL Fraud Prevention Market size is projected to reach USD 25.9 Billion by 2034, growing from USD 3.7 Billion in 2024, at a compound annual growth rate (CAGR) of 21.50% during the forecast period from 2025 to 2034.
• In 2024, the Solutions segment led the BNPL Fraud Prevention Market, holding a dominant share of more than 70.5%.
• The On-Premise Deployment segment held a major market share of over 57.3% in 2024.
• New Account Abuse was the leading segment in BNPL Fraud Prevention in 2024, capturing more than 28.8% of the market share.
• In 2024, North America dominated the BNPL Fraud Prevention Market, accounting for more than 40.6% of the market share, with revenues reaching approximately USD 1.5 billion.
• The U.S. market for BNPL fraud prevention in 2024 was valued at $1.20 billion, and it is expected to grow at a CAGR of 19.4%.

U.S. BNPL Fraud Prevention Market

In 2024, the U.S. market for Buy Now, Pay Later (BNPL) fraud prevention was valued at $1.20 billion. It is projected to grow at a compound annual growth rate (CAGR) of 19.4%. The robust growth in BNPL services is driven by consumers’ increasing demand for flexible payment options.

As BNPL platforms gain popularity, the need for effective fraud prevention solutions has become crucial to protect both service providers and users from fraudulent transactions, which can result in financial losses and damage trust in the system.

To tackle these challenges, companies in the fraud prevention market are investing in AI, machine learning, and big data analytics to detect fraud patterns and enable real-time prevention. Stricter regulations and the need for compliance are also driving BNPL providers to adopt strong fraud prevention strategies, boosting market growth and consumer confidence.

In 2024, North America held a dominant market position in the BNPL Fraud Prevention Market, capturing more than a 40.6% share with revenues reaching approximately USD 1.5 billion. This significant market share is driven by the region’s advanced financial services infrastructure and its rapid adoption of emerging technologies.

The growth of e-commerce and digital payment solutions in North America has fueled the adoption of BNPL services, increasing the need for strong fraud prevention mechanisms due to the higher risks of online fraud. Recognizing this, North American companies have heavily invested in AI and machine learning technologies to detect and prevent fraudulent transactions in real time.

Moreover, the regulatory environment in North America is relatively stringent, prompting BNPL providers to prioritize compliance and fraud prevention to mitigate legal and financial risks. This regulatory framework drives the adoption of sophisticated fraud detection and prevention technologies, further boosting the market growth.

The presence of major technology and financial service players in North America, who invest heavily in R&D, strengthens the region’s market leadership. These companies drive innovation in fraud prevention, setting global standards and fostering a competitive landscape that promotes continuous improvement in fraud prevention strategies.

Analysts’ Viewpoint

The financial losses from payment defaults and fraud strongly motivate BNPL providers and merchants to invest in effective fraud prevention tools. Technological advancements in AI and machine learning are enhancing fraud detection systems, making them more sophisticated and efficient, which further drives market growth.

The popularity of BNPL services, driven by convenience and accessibility, highlights the need for effective fraud prevention strategies. As more consumers use these services, the risk of fraud increases, prompting BNPL providers to strengthen fraud prevention measures to ensure user safety and improve the overall experience.

There are significant opportunities in the BNPL fraud prevention market, especially in developing innovative and consumer-friendly solutions that can seamlessly integrate with existing payment systems. The focus is on developing more sophisticated fraud detection algorithms that improve the speed and accuracy of systems to detect and respond to fraudulent activities in real-time.

Market expansion is key, especially in regions where digital payments are growing but fraud prevention measures are underdeveloped. This presents a significant opportunity for BNPL fraud prevention providers to establish early dominance and form strong partnerships with local platforms, ensuring long-term growth and profitability.

Offering Analysis

In 2024, the Solutions segment held a dominant market position within the BNPL Fraud Prevention Market, capturing more than a 70.5% share. This segment includes various technologies such as identity verification solutions, transaction monitoring solutions, and machine learning and AI solutions, which are pivotal in preventing fraudulent activities in BNPL transactions.

The substantial share of this segment is primarily due to the critical need for real-time and effective fraud detection and prevention mechanisms that these solutions provide. As BNPL schemes become increasingly popular, the demand for sophisticated solutions to ensure transaction security and customer trust continues to rise.

Identity verification solutions are key in the Solutions segment, accurately validating customer identities at the point of transaction to reduce identity fraud risks. This step is crucial for maintaining BNPL service integrity, building consumer confidence, and reinforcing the dominance of the Solutions segment.

Transaction monitoring solutions are vital to the Solutions segment, as they track and analyze transactions in real time to detect suspicious patterns of fraud. The ability to swiftly identify and address potential fraud minimizes financial losses for merchants and BNPL providers, highlighting the segment’s importance in the market.

Deployment Models Analysis

In 2024, the On-Premise Deployment segment held a dominant market position in the BNPL fraud prevention market, capturing more than 57.3% of the market share. This segment’s leadership can be attributed to several key factors that resonate with the needs of large enterprises and financial institutions prioritizing security and control over their data and systems.

On-premise solutions offer these organizations the ability to closely manage and monitor security measures, ensuring that all data remains within their controlled IT environments. This is particularly crucial in handling sensitive financial information and maintaining compliance with stringent regulatory requirements.

Moreover, on-premise deployment allows companies to customize their fraud prevention solutions to fit specific operational workflows and security protocols. Unlike cloud-based systems, which can require compromises in terms of configurability and integration, on-premise systems can be tailored to the unique needs of each organization.

On-premise deployment in the BNPL fraud prevention market offers enhanced performance reliability, as it relies less on external data connections, reducing the risk of downtime or latency. This is crucial for businesses processing high transaction volumes, where even minor delays can lead to financial losses and a poor customer experience.

Application Analysis

In 2024, the New Account Abuse segment held a dominant market position in the BNPL Fraud Prevention Market, capturing more than 28.8% share. This segment’s prominence is due in large part to the rapid expansion of online retail and financial services, where new account creation is a frequent entry point for fraudulent activities.

New Account Abuse typically involves the creation of accounts using false or stolen information to exploit credit offerings and payment systems. As BNPL services have grown in popularity, they’ve become attractive targets for this type of fraud, given the often minimal credit checks required at the point of account creation.

To combat this, BNPL providers have increasingly invested in technologies that can detect and prevent New Account Abuse. Advanced verification methods, including digital footprint analysis and cross-referencing data against public and private databases, are now commonly employed to validate new account requests.

The segment’s growth is supported by regulatory pressures for stronger security measures around new account openings to protect consumers and maintain financial system integrity. These regulations have prompted the adoption of advanced fraud detection and prevention solutions across the BNPL sector, making New Account Abuse a key focus for innovation and investment in fraud prevention.

Key Market Segments

By Offering

• Solutions
  • Identity Verification Solutions
  • Transaction Monitoring Solutions
  • Machine Learning and AI Solutions
  • Others
• Services-Consulting Services
  • Implementation and Integration Services
  • Maintenance and Support Services

By Deployment Models

• Cloud-Based Deployment
• On-Premise Deployment

By Application

• New Account Abuse
• Synthetic Identity Fraud
• Account Takeovers (ATOs)
• Fraudulent Chargebacks
• Transaction Laundering
• Others (Never-Pays Fraud, Trojan Horse Fraud, etc.)

Driver

The Surge in E-commerce Adoption

The rapid growth of e-commerce has significantly propelled the adoption of Buy Now, Pay Later (BNPL) services. Consumers increasingly seek flexible payment options that allow them to purchase items immediately while deferring payments. This demand for convenience and immediate gratification has made BNPL an attractive choice for online shoppers.

Merchants, aiming to enhance customer experience and boost sales, have integrated BNPL solutions into their platforms. This integration not only increases conversion rates but also attracts a broader customer base, including those who might not have immediate funds available. The seamless integration of BNPL at checkout points reduces cart abandonment rates, further driving its popularity among retailers and consumers alike.

Restraint

Rising Regulatory Scrutiny

As BNPL services become more prevalent, regulatory bodies are intensifying their scrutiny to protect consumers from potential financial pitfalls. Concerns have been raised about consumers accumulating debt without fully understanding the terms of BNPL agreements. In response, several countries are implementing stricter regulations.

In addition to the regulatory measures, the UK government’s plan to bring BNPL providers under the FCA’s purview could heighten competition. Larger, well-established institutions with more resources may navigate the new rules more easily, while smaller or newer BNPL providers could face compliance challenges. This may lead to industry consolidation, with mergers or acquisitions as smaller players struggle to meet the regulatory burden, potentially affecting innovation and reducing consumer choice.

Opportunity

Expansion into Diverse Sectors

BNPL services have primarily been associated with retail purchases; however, there is a growing opportunity to expand into diverse sectors such as healthcare, education, and travel. Offering BNPL options in healthcare can make medical procedures more accessible to patients by allowing them to manage expenses over time.

In addition to education and travel, BNPL providers can also expand into sectors like healthcare, where patients can spread the cost of medical treatments or procedures over time. This could make healthcare more accessible, particularly for non-emergency services, while creating a new revenue stream for BNPL providers. By diversifying into these sectors, BNPL companies can reach broader audiences and further accelerate growth.

Challenge

Mitigating Fraud Risks

The convenience of BNPL services has unfortunately made them a target for various fraudulent activities. Common fraud types include synthetic identity fraud, where criminals create fake identities to open BNPL accounts, and account takeover fraud, where fraudsters gain unauthorized access to legitimate accounts.

Additionally, the rapid approval processes inherent in BNPL can sometimes lead to inadequate due diligence, further exposing providers to fraud risks. To combat these challenges, BNPL providers must implement robust fraud prevention measures, such as real-time transaction monitoring, enhanced identity verification processes, and continuous assessment of user behavior to detect anomalies.

Emerging Trends

One notable trend is the adoption of machine learning and artificial intelligence (AI) to detect fraudulent activities. These technologies analyze vast amounts of transaction data in real-time, identifying patterns that may indicate fraud.

Another emerging approach is the use of behavioral biometrics. This involves monitoring the unique ways individuals interact with devices, such as typing speed or mouse movements. By establishing a behavioral profile for each user, deviations can be detected, signaling potential fraudulent activity.

Additionally, multi-layered authentication methods are gaining traction. Beyond traditional passwords, incorporating biometric verification (like fingerprints or facial recognition) and one-time passcodes adds extra security layers, making it more challenging for fraudsters to gain unauthorized access.

Furthermore, there’s a growing emphasis on real-time data orchestration. By centralizing and analyzing data from various sources instantly, BNPL providers can make informed decisions about the legitimacy of transactions as they occur, reducing the window of opportunity for fraudulent activities.

Business Benefits

Implementing robust fraud prevention measures in BNPL services offers several significant advantages for businesses. Effective fraud prevention safeguards revenue. By detecting and preventing fraudulent transactions, businesses can minimize financial losses, ensuring that profits are protected.

It enhances customer trust and loyalty. When customers know that a BNPL provider has strong security measures in place, they feel more confident using the service, leading to increased satisfaction and repeat business. On contributes to operational efficiency. Advanced systems can automate the detection process, reducing the need for manual reviews and allowing staff to focus on other critical tasks. A low fraud rate also safeguards the company’s reputation, as security lapses can drive away potential customers, while a strong security record enhances its competitive edge.

Key Regions and Countries

• North America
  • US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • Singapore
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Player Analysis

Key players in the BNPL Fraud Prevention Market focus on leveraging technology to secure transactions, identify risks, and enhance consumer trust.

Socure is a prominent player in the BNPL fraud prevention market, offering identity verification and fraud detection solutions. Their platform uses machine learning and artificial intelligence to analyze a vast range of data points in real-time. By examining behaviors and patterns across various data sources, Socure helps BNPL providers identify potentially fraudulent transactions before they occur.

SEON has made a name for itself by providing a fraud prevention platform designed to detect and prevent fraud in online transactions. SEON’s key differentiator is its ability to offer real-time analysis using behavioral biometrics, device fingerprinting, and other advanced methods.

LexisNexis Risk Solutions brings a wealth of experience to BNPL fraud prevention. The company specializes in identity verification and risk management, offering tools that analyze customer data and transaction patterns. LexisNexis uses advanced analytics and machine learning to provide actionable insights, which help BNPL providers mitigate risk and prevent fraudulent activities.

Top Key Players in the Market

• Socure
• SEON
• LexisNexis Risk Solutions
• Trustfull
• DataVisor
• Trulioo
• Kount
• Ekata
• NICE
• Others

Top Opportunities Awaiting for Players

• Real-Time Data Enrichment and Risk Assessment: By enhancing fraud prevention systems with real-time data enrichment, BNPL providers can gain a deeper understanding of their customers through social and digital profiling. This allows for better risk assessments and the ability to spot and flag suspicious users early in the process, reducing potential fraud.
• Advanced AI-Driven Fraud Detection Systems: Implementing AI-driven algorithms can help detect and mitigate evolving fraud trends in real time. This includes identifying subtle and connected events that could indicate fraudulent activity, allowing for quicker and more effective interventions.
• Comprehensive Fraud and Risk Platforms: Utilizing platforms that integrate data across multiple sources can significantly enhance the ability to detect a wide range of BNPL fraud types, including application fraud, synthetic identity fraud, and account takeover fraud. These platforms help in consolidating information and providing a more robust defense against fraud.
• Customizable Fraud Detection Rules: Offering the capability to customize fraud detection rules according to specific business needs can provide BNPL players with a tailored approach to fraud prevention. This not only increases the effectiveness of fraud detection mechanisms but also aligns them more closely with company-specific risk thresholds and consumer profiles.
• Partnerships and Collaborations: Engaging in partnerships with fintech companies, data analytics firms, and other stakeholders can help BNPL providers access advanced technologies and expertise in fraud prevention. These collaborations can lead to the development of more sophisticated fraud prevention solutions that are capable of addressing the unique challenges of the BNPL sector.

Recent Developments

• In February 2025, Indian fintech Perfios acquired Clari5, a financial crime detection platform specializing in fraud mitigation and anti-money laundering (AML). This acquisition strengthens Perfios’ ability to combat evolving financial crimes while expanding its reach globally.
• In February 2025, Worldpay announced its acquisition of UK-based Ravelin, an AI-powered fraud prevention platform. This move enhances Worldpay’s fraud detection portfolio, allowing merchants to address payment fraud, account takeovers, and other financial crimes effectively.
• In January 2025, blockchain data firm Chainalysis acquired Alterya, an AI-driven fraud detection solution. This acquisition bolsters Chainalysis’ capabilities in real-time fraud prevention for cryptocurrency exchanges and payment systems.
• In December 2024, Trustfull, a leader in fraud prevention through Identity Intelligence, has partnered with Scalapay, a top European BNPL provider. This collaboration will enhance fraud protection across Scalapay’s European network, using Trustfull’s platform to detect fraudsters and prevent first payment defaults.

Report Scope