"No longer is the smartphone itself the most lucrative target for scammers and robbers - it’s the financial apps contained within,” says District Attorney Alvin Bragg. “Thousands or even tens of thousands can be drained from financial accounts in a matter of seconds with just a few taps."

Bragg says that there has been a "growing number" of thefts in the New York city region, with crooks convincing victims to hand over their phones voluntarily or even assault or drug people to gain access.

Bragg is not the first to raise concerns about the rise of P2P payments apps: last year Senate Democrats, including Elizabeth Warren, called on financial regulators to take action to tackle fraud related to the bank-owned Zelle service.

Warren has claimed that fraud claims had tripled between 2020 and 2022, costing Americans hundreds of millions of dollars.

The Manhattan district attorney's letter offers several suggestions, including the addition of a second and separate password for accessing the payment apps as a default option. Bagg also suggests default lower limits on the monetary amount of total daily transfers, and wait times and secondary verification of up to a day for large transactions.

Says Bragg: "Without additional protections, customers’ financial and physical safety is being put at risk. I hope these companies accept our request to discuss commonsense solutions to deter scammers and protect New Yorkers’ hard-earned money."

In a statement, Venmo parent PayPal says: "In addition to proactively leveraging sophisticated fraud detection tools, manual investigations, and partnering closely with law enforcement agencies to protect our customers against common scams, we have several options in place to enable enhanced layers of security and protection directly within our apps."

Says Zelle parent Early Warning Services: "As a result of our continued efforts to build on Zelle’s strong foundation of security, less than one tenth of one percent of transactions are reported as fraud or scams, and that percentage keeps getting smaller."

In Brazil, the central bank was forced to imposed spending limits on its new PIX instant payments platform in 2021 the face of a sharp increase in "lightning kidnappings".

São Paulo saw a 40% rise in lightning kidnappings - where people are grabbed on the street and forced to transfer money in exchange for their release - in the first six months after PIX's launch.

Learn more about payments at NextGen Nordics on the 23 April 2024.