Alarming Rise of Fraud in P2P Lending Market

There has been an alarming Rise of Frauds that puts India's Booming Peer-to-peer (P2P) Lending Market at Risk – and A question arises can Innovative Tech Be the Answer to this growing problem ?

Peer-to-peer (P2P) transactions have indeed become increasingly common, facilitated by smartphone apps that allow users to send and receive money easily. These transactions are often used for splitting bills, repaying friends, or making purchases, providing a convenient alternative to cash or credit cards.

However, with the rise in popularity of P2P payment apps, there has also been an increase in scams and fraudulent activities targeting users. Some common payment app scams include:

Impersonation Scams: Scammers may impersonate someone you know or trust, such as a friend or family member, and request money for a fake emergency or unexpected expense.

Phishing Scams: Scammers may send phishing emails or text messages posing as the payment app provider, asking users to provide personal or account information. This information can be used to gain unauthorized access to the user's account.

Fraudulent Transactions: Scammers may use stolen payment credentials or hacked accounts to make unauthorized transactions. Users should regularly monitor their account activity and report any suspicious transactions to the payment app provider.

QR Code Scams: Scammers may create fake QR codes that, when scanned, redirect users to malicious websites or prompt them to send money to the scammer's account.

India's peer-to-peer (P2P) lending industry is on a meteoric rise, projected to reach a staggering ₹5.5 trillion by 2025. While this growth attracts investors, a dark undercurrent threatens its sustainability: i.e. fraudulent activities. Alarmingly, 25% of Indian P2P investors report encountering scams, with an average loss of ₹20,000. This growing threat not only erodes investor confidence but also puts platforms at risk of non-compliance with strict RBI regulations. However, innovative technology offers a ray of hope.

Dr. Deepak Kumar Sahu Editor-in-chief- VARINDIA