Fraudio Exposes 25% Surge in Payment Fraud Driven by Coordinated Network Attacks

Quick Summary

Payment fraud has increased by 25% between 2024 and 2026, driven by coordinated network attacks rather than isolated incidents. Fraudio’s analysis reveals that over 90% of fraud is linked to shared digital infrastructure, requiring payment providers to adopt layered, network-level intelligence to maintain security without increasing customer friction.

How is Coordinated Payment Fraud Evolving in 2026?

Coordinated attack networks have replaced the era of the lone fraudster. Fraudio’s latest data shows that payment fraud is increasingly structural, with 91.08% of fraud events linked to IPs tied to 25 or more cards. This shift suggests that criminals are utilizing shared infrastructure to launch high-volume, automated attacks across the global payment ecosystem. To combat this, firms must move beyond transaction-level screening and begin analyzing the broader context of entity relationships.

• 91.08% of fraud events are tied to IPs used by 25+ unique cards.
• 25% relative increase in average fraud rates observed since 2024.
• Network-level signals are now the primary indicator of sophisticated criminal activity.

Why Are Submerchants and Layered Commerce at Higher Risk?

The rise of layered commerce models, including marketplaces and payment facilitators, has created significant visibility gaps. Fraudio found that transactions routed via submerchants carry a fraud rate nearly five times higher than direct merchant transactions. This disparity highlights how complex payment journeys can obscure fraudulent intent if risk controls are not integrated across the entire flow. Real-time visibility into every entity in the chain is now a prerequisite for effective risk management.

• 4.92x higher fraud rate in submerchant transactions vs direct merchants.
• 0.141% fraud rate for initial recurring payment setups.
• Visibility gaps in platforms and PSPs are being actively exploited by coordinated networks.

Can 3DS and Traditional Authentication Stop Modern Fraud?

Relying solely on 3D Secure (3DS) is no longer a sufficient defense. Fraudio’s analysis revealed that even when 3DS was successfully used, a 0.218% fraud rate persisted. This proves that layered fraud prevention—combining authentication with behavioral and contextual intelligence—is essential. Furthermore, overly aggressive controls are backfiring; false-positive rates have nearly doubled, reaching 23.479% in May 2026, which threatens to alienate legitimate customers in high-stakes sectors like eCommerce and MOTO.

“The danger is that businesses respond to fraud pressure by simply becoming more aggressive with declines. That may reduce some fraud, but it also risks blocking good customers and damaging approval rates. The real opportunity is precision by stopping coordinated fraud earlier, while protecting legitimate customers from unnecessary friction,” said Gadi Erel, VP Product at Fraudio.

FF NEWS TAKE:

This report from Fraudio is a wake-up call for the industry. The 25% spike in payment fraud proves that legacy, siloed monitoring is failing. By highlighting that 90% of fraud is network-linked, Fraudio makes a compelling case that AI-driven network intelligence is no longer a luxury—it is the only way to maintain high approval rates while defending against industrial-scale attacks. This definitely moves the needle by shifting the focus from the transaction to the infrastructure.