Executive Brief 001
Author: Simon Hewitt, CEIO, OtherPay Pty Ltd
Purchase fraud: a disease, not a cost of doing business
For decades, the financial services industry has quietly accepted purchase fraud as an unavoidable “cost of doing business.”
Listen to this article • 5:42 min
Losses are reimbursed, systems are patched, and life goes on – with the bill ultimately passed to consumers through higher fees and inflated prices.
But this mindset is deeply flawed. In every other area of public harm – from disease control to organised crime – society refuses to tolerate systemic damage as inevitable. We invest heavily in elimination, not accommodation. Yet, in payments, we’ve normalised exposure and labelled it “manageable risk.”
Fraud is not a cost; it’s a symptom – one of a deeper design failure that allows unauthorised transactions to occur in the first place.
The Absurd Acceptance of Harm
When it comes to health, safety, or security, we don’t shrug off recurring harm – we act decisively to eliminate it.
We wage multi-billion-dollar wars on drugs, fund global vaccination campaigns to eradicate disease, and impose stringent laws to dismantle human trafficking and organised crime.
Given this landscape, it’s worth asking: why not focus on a solution that addresses the root causes of payment card vulnerabilities without necessitating a complete overhaul of the existing infrastructure? Such a solution could:
These efforts share one thing in common: zero tolerance for avoidable suffering.
Disease
Cancer and infectious diseases are met with massive investment in prevention and cure, not acceptance of casualties.
Illicit trade:
Governments dismantle drug cartels, seize assets, and prosecute financiers. No one calls cartel activity a “cost of living.”
Counterfeit goods and medicines:
Industries deploy serialization, secure supply chains, and real-time tracking to stop fake products before they harm consumers.
Environmental pollution:
Businesses face strict regulation, with offenders fined or shut down – we clean up the source, not the mess.
Yet, in payments – a system equally essential to everyday life – we tolerate systemic fraud as a permanent fixture.
Billions are lost, criminal networks thrive, and consumers pay the price, all under the banner of “acceptable loss.”
The Absurd Acceptance of Harm
Today’s approach to fraud resembles treating symptoms instead of the disease. Banks and card issuers pour resources into detection, not prevention – relying on machine learning and AI to identify behavioural anomalies after a transaction has already been attempted.
This reactive model assumes every purchase might be legitimate until proven otherwise. It’s like deploying medical diagnostics that work only after infection has spread.
Even more paradoxically, consumers are expected to trust that AI can recognise their behaviour better than they can themselves. When algorithms guess wrong, legitimate transactions are blocked, leaving customers stranded while fraud still thrives elsewhere.
The financial system has confused monitoring with control – and as long as credentials remain permanently “on,” exposure remains inevitable.
The Unacceptable Cost of Tolerance
We don’t treat cancer, pollution, or counterfeit medicine as inevitable – we fight to eliminate them.
Yet in payments, purchase fraud is quietly accepted as “the cost of doing business.”
We invest billions to cure disease, clean rivers, and trace fake drugs to protect consumers, but when criminals steal billions through fraud, the response is simply to reimburse and move on.
No other industry normalises harm this way.
Fraud funds organised crime, inflates prices, and erodes trust – yet it persists because prevention is seen as too ambitious.
OtherPay proves otherwise. Like a vaccine, it prevents infection rather than managing symptoms – reducing the opportunity for misuse by requiring user activation.
It’s time to treat purchase fraud with the same urgency we apply to every other preventable threat – and finally minimise it at its source by removing standing credential usability when inactive.
The Case for Elimination, Not Mitigation
OtherPay challenges the very premise of “inevitable fraud.”
Its technology removes the opportunity for theft by ensuring the payment instrument itself cannot be used unless the legitimate user activates it.
Like a vaccine preventing infection rather than treating symptoms, OtherPay neutralises the risk at its source.
- No standing credentials during inactivity, significantly reduced exposure.
- Reduced exposure, reduced unauthorised fraud opportunity.
By design, when inactive the payment instrument cannot be used for transactions, materially reducing unauthorised purchase-fraud opportunities.
The Case for Elimination, Not Mitigation
Fraud is not victimless. It fuels illicit economies, finances organised crime, and drives up costs across the financial ecosystem.
Every fraudulent transaction ripples outward — from reimbursement costs and compliance burdens to inflated merchant fees and consumer prices.
To continue calling this “the cost of doing business” is like describing pollution as “the cost of progress.”
It’s an ethical blind spot – one that can be closed only when prevention becomes the default standard, not a premium feature.
A Call for Industry Accountability
It’s time to hold the financial sector to the same moral and practical standard applied elsewhere: eliminate what harms consumers and society.
OtherPay reduces reliance on fraud detection by removing standing credential usability when inactive. The question isn’t how well we can manage fraud – it’s why we tolerate it at all.
Conclusion
Fraud has never been inevitable – only tolerated.
The financial industry’s choice to absorb rather than eliminate it has created a global economy where criminals profit, consumers pay, and trust erodes.
OtherPay changes that equation. By empowering users to activate their own transactions, it removes the opportunity for unauthorised use when inactive.
No predictive AI, no reactive investigation – just prevention by design.
It’s time to stop treating fraud as a cost and start treating it as a disease.
And like every preventable disease, the cure already exists.
