The Rise of Payment Fraud in Southeast Asia: How Omise Is Combating It

‍"Shopee, Lazada, TikTok Shop, and Tokopedia" If you live in Southeast Asia, chances are you've heard of these names — or even shopped on one of them. Since COVID-19 accelerated digital adoption, these e-commerce platforms have become household names, and online shopping has become the region’s new way of life. By 2027, it's estimated that 88% of the population — that’s about 402 million users — will be engaged in e-commerce in one way or another. ^[1]

That’s already a big number, but it doesn’t stop there.

Digital payment solutions in Southeast Asia are more developed and diverse than in many other parts of the world, offering consumers greater convenience and ease in online shopping. The region is also leading in real-time payment systems, such as Thailand’s PromptPay and Malaysia’s DuitNow, while offering alternative payment methods like Atome (BNPL), GrabPay, and Rabbit LINE Pay (e-wallets). The market’s digital payment transaction volume is expected to reach $417 billion by 2028—a 60% increase from 2023. ^[2]

It's true that the e-commerce boom benefits the economy, but it also comes with its downsides.

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E-commerce Fraud in SEA: A Growing Threat That Demands Action

Many of us have come to realize that not everything that glitters is gold. As digital commerce adoption accelerates, the risk of fraud is growing just as quickly. By 2025, Southeast Asia has become one of the fastest-growing regions for cyber fraud worldwide. 

More than half of consumers in markets such as Thailand, the Philippines, Malaysia, Singapore, and Indonesia report encountering scams at least once a week.^[3] They are constantly surrounded by various types of scams in their daily lives — from SMS phishing to identity theft.

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Case in Point: Emerging Fraud on Marketplaces

This evolving fraud tactic blends elements of chargeback fraud and triangulation fraud. It starts when a scammer creates a fake online shop on social media, using stolen product images and descriptions from a legitimate merchant. When a buyer places an order, the scammer turns around and purchases the same item from the real merchant. The merchant then generates a QR code for payment via the platform’s payment gateway.

The scammer forwards this QR code to the buyer, who unknowingly makes the payment—thinking it's for their original order.

Here’s the twist: once the payment is confirmed, the scammer requests a refund through the e-commerce platform and pockets the full amount. The buyer ends up with no product, no legitimate seller to contact, and no clear way to get their money back. In many cases, the buyer is left at a dead end.

The platform, too, is often left in the dark. Without visibility into who actually made the payment, it’s difficult to verify legitimacy. In some instances, the platform itself becomes the victim. To maintain customer satisfaction, platforms sometimes end up both issuing refunds and compensating victims, resulting in financial loss.

This is the unfortunate reality for many consumers in Southeast Asia. What’s even more troubling is that the most frequent targets are underbanked individuals with limited digital literacy, making them especially vulnerable.

This is more than just a digital inconvenience — it reflects deeply rooted socioeconomic challenges and is having a significant impact on the region’s economy. According to a UN report, East and Southeast Asian countries lost an estimated $37 billion to cyber fraud in 2023.^[4] The growing scale of losses is something no sector can afford to ignore.

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Omise's Frontline Fraud Prevention Measures

As a leading payment provider in Southeast Asia, Omise offers a secure and reliable transaction infrastructure while continuously developing innovative solutions to combat fraud. We employ both automated technology and human experts at every step. Let’s start with the first one.

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Thorough KYC Process by Human Experts
At Omise, trust starts with who we work with. We are committed to supporting only legitimate businesses that meet strict compliance standards, ensuring a safer ecosystem for everyone involved.

Once merchants submit their documents during the registration process, our team of specialists begins verifying their identities and assessing their risk profiles. This includes ensuring the business is not engaged in any financial crimes and is fully compliant with the regulations of each operating country.

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Multi-Layer Fraud Detection and Transaction Monitoring System
Once merchants are set up and ready to operate, we ensure that every transaction processed through Omise is protected by multiple layers of security and fraud screening. Our system leverages advanced technologies, including:

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• Hybrid Monitoring System: We have a team of fraud analysts working with machine learning tools to identify suspicious activities. In the future, we plan to implement AI-driven analytics systems that monitor transaction behavior in real-time. These machine learning models will distinguish between typical user behavior and unusual patterns. When anomalies are detected, the system will assess transaction risk in milliseconds and automatically block potentially fraudulent activity. Throughout this process, the system continuously learns and adapts to emerging fraud patterns.
  
  

• 3-D Secure Authentication: Omise has adopted the EMV 3DS protocol to protect online payment transactions—technology that significantly reduces the risk of fraud by authenticating each transaction through multi-factor authentication. (We’re all probably familiar with receiving an OTP via SMS to verify that it’s really us making the purchase.) By implementing EMV 3DS, we’ve been able to increase transaction approval rates while effectively minimizing fraudulent activity.
  
  
• IP Geolocation Technology: IP geolocation technology may sound simple and familiar to many, but it's a powerful tool in fraud prevention. It not only helps route payments to the most suitable processor based on the customer’s location, but also tells us where an order originates. By comparing this data with the cardholder’s information, we can identify mismatches and flag potentially fraudulent transactions.

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Customer and Merchant Support

We offer proactive support to all merchants in the Omise network to ensure smooth, secure, and fast payment processing. This includes helping affected buyers handle fraud cases and working closely with merchants during fraud investigations. Our goal is to strengthen fraud prevention measures and create a safer payment environment for everyone.

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Up-to-Date Regulatory Compliance
Trust is a cornerstone of everything we do at Omise. We operate under PCI DSS 4.0 Level 1, the highest global standard for organizations handling sensitive financial data. In addition, we ensure full compliance with local regulations in every market we serve. For instance, we are licensed by the Bank of Thailand (BOT) with almost the full range of financial services under the Payment System Act, hold a Major Finance Institution license in Singapore, and maintain equivalent authorizations in Malaysia, Japan, and the United States.

Moreover, in Thailand, we are now integrating with the Central Fraud Registry (CFR), the multi-industry transaction data sharing system playing a major role in assisting police and regulators to prevent digital fraud in the country.

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Digital commerce in Southeast Asia is expected to continue its rapid growth, and with it, the risk of fraud will also increase. Therefore, fraud prevention is no longer just a cost. It is a critical investment for business growth. At Omise, we are committed to helping our partner companies build a secure digital payment future together, aiming to strike the right balance between safety and convenience for customers—efforts that, in turn, help drive even greater economic growth.

Looking for a secure checkout solution? Learn more here

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^Resource

^{Source of Asia. (2025, February 3). E-Commerce market in Southeast Asia 2025 – 2026. https://www.sourceofasia.com/e-commerce-market-in-southeast-asia-2025-2026/}

^{Zhong, O. L. (2025, March 17). Evolving Cyber Threats Target Southeast Asia's Underbanked Populations - Thailand Business News. Thailand Business News. https://www.thailand-business-news.com/crime/186744-evolving-cyber-threats-target-southeast-asias-underbanked-populations#:~:text=Southeast%20Asia%20has%20seen%20an,reliance%20on%20informal%20financial%20services.}

^{Jazeera, A. (2025, April 21). ‘A cancer’: UN warns Asia-based cybercrime syndicates expanding worldwide. Al Jazeera. https://www.aljazeera.com/news/2025/4/21/a-cancer-un-warns-asia-based-cybercrime-syndicates-expanding-worldwide#:~:text=While%20the%20report%20said%20countries,Europe%2C%20and%20the%20Pacific%20Islands}

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