Block Risk Lead Brian Boates found that even tech-savvy young consumers who use their phones as a conduit to everyday life reported the challenges of avoiding scams. “The last time we went into the field, we found that about 3 in 10 consumers say they’ve been scammed, and about 40% of Gen Z” has fallen prey to the fraudsters, Webster said. This statistic underscores a challenge for the payments industry. It must protect individuals who value and use peer-to-peer (P2P) payments as a staple of their daily financial lives. To that end, Block announced Thursday (June 26) the prevention of approximately $2 billion in potential P2P fraud scams since 2020, aided by advanced technologies and the in-app Cash App payments warnings feature that alerts customers in real time to examine their transactions before moving ahead. A challenge in combating scams lies in the nature of the transactions themselves. Many of them are authorized transactions. Unlike traditional fraud where an unauthorized party gains access to an account, in scam scenarios, “the customer is willing and wants to proceed with the payment,” Boates said. This makes intervention particularly complex, as it requires interrupting a user’s determined intent. The emotional conviction tied to these transactions often supersedes rational caution. Beyond direct scams, the payment industry also grapples with the persistent issue of first-party fraud. This occurs when an individual misrepresents a legitimate transaction as a scam to reclaim funds. Block’s various lines of defense against these evolving threats are rooted in its technological prowess. “Block is a technology company,” Boates said. “We take a very technology-forward approach to solving these kinds of problems.” He said that “when it comes to fraud and scam detection, it’s really rooted in machine learning. We’ve built a number of models internally using all of the data points that we have historically that have gotten really, really good at detecting potentially scam payments in real time.” Machine learning powers the warning feature where the company intervenes with users when the models signal a transaction may be high risk, rather than introducing friction into each payment, he said. The warning “gives customers a moment to pause, reflect and reconsider [the transaction], if it feels right, and if they’d like to proceed with the payment or not,” Boates said. The precision of these warnings is a key factor in their effectiveness. They are issued for only about 1.5% of P2P payments made through Cash App, he said. Beyond these warnings, Block’s models can take more definitive action when risk levels spike.