New figures from TransUnion show that 3.0% of digital transactions involving South African consumers were flagged as suspected fraud last year, down from 4.3% in 2024.
On the surface, the decline appears encouraging. But researchers say the trend may actually reflect a dangerous shift in criminal behaviour rather than an improvement in online safety.
The findings offer a glimpse into a broader transformation unfolding across Africa’s digital economy, where growing internet penetration, expanding e-commerce and rising digital payments are creating new opportunities for both businesses and cybercriminals.
Fewer attacks, greater precision
The global cybercrime industry is undergoing a major technological upgrade.
Generative AI tools can now create convincing fake messages, clone voices, produce realistic images and automate personalised scams at a scale that was previously impossible.
Security experts worldwide have warned that these tools are lowering barriers to entry for criminals while improving the effectiveness of fraud campaigns.
TransUnion’s findings suggest that South Africa is already experiencing the effects of that shift.
“The threat landscape is evolving faster than ever for consumers and businesses,” said Amritha Reddy, senior director of fraud product management at TransUnion Africa.
The report argues that falling fraud rates should not automatically be interpreted as reduced criminal activity. Instead, fraudsters appear to be focusing on quality rather than quantity, using AI-powered tools to identify vulnerable targets and execute more convincing scams.
That evolution is becoming increasingly important for South Africa, which has one of Africa’s most sophisticated banking sectors, a mature e-commerce market and one of the continent’s largest digital consumer bases.
Trust has become the new weapon
Perhaps the most striking finding is where fraud is now taking place.
Among South Africans who lost money to digital fraud during the past year, 33% said they were deceived by third-party seller scams operating on legitimate online marketplaces.
That signals a fundamental change in how fraud works.
For years, consumers were told to avoid suspicious links, unknown websites and unsolicited emails. Today, many scams are occurring inside platforms people already trust.
Fraudsters are increasingly creating convincing seller profiles, hijacking legitimate accounts and exploiting established digital relationships rather than directing users to obviously fraudulent websites.
The trend mirrors developments seen in major digital markets around the world, where criminals are embedding themselves within trusted ecosystems and leveraging consumer confidence to bypass traditional security awareness measures.
In many cases, the challenge is no longer identifying a fake website. It is identifying a criminal hiding behind a legitimate profile.
The rise of account takeover fraud
Another finding that sets South Africa apart is the growing focus on account takeover attacks.
The highest level of suspected fraud occurred during account login attempts, where 3.0% of transactions were flagged as potentially fraudulent. This exceeded fraud detected during account creation and financial transactions.
The figures suggest that criminals increasingly prefer to gain control of existing accounts rather than create fake ones.
Account takeover attacks can involve stolen passwords, SIM-swap fraud, compromised devices or sophisticated social engineering tactics designed to bypass security controls.
For banks, retailers, telecommunications firms and fintech companies, this represents a major challenge because fraud prevention can no longer focus solely on customer onboarding.
Instead, businesses must monitor risks continuously throughout the customer relationship.
Government services become a growing target
The report also highlights an emerging risk facing governments across Africa as public services continue their digital transformation.
Government-related transactions recorded South Africa’s highest suspected fraud rate at 12.5%, ahead of gaming and insurance.
The finding comes as governments across the continent invest heavily in digital identity programmes, online tax systems, electronic licensing services and digital citizen platforms.
While these initiatives improve efficiency and access, they also create attractive targets for cybercriminals seeking to exploit trusted institutions.
Fraudsters are increasingly impersonating government agencies, replicating official communications and leveraging public trust in state institutions to deceive victims.
The data suggests that the digitisation of government services, while essential for economic modernisation, is creating a new cybersecurity battleground.
Consumers are paying the price
The median reported loss among South African consumers who fell victim to digital fraud reached R11,055 ($600), making it the second-highest reported loss in Africa after Kenya.
Although the figure remains below the global median loss of R27,879 ($1,670), it underscores the growing financial consequences of digital fraud for households already facing economic pressures.
The threat is also shaping consumer behaviour.
According to the survey, 85% of South Africans said the security of their personal information is the most important factor when deciding whether to transact online.
That finding suggests security is becoming more than a compliance issue. It is increasingly a competitive advantage.
For businesses, trust may prove to be one of the most valuable assets in Africa’s expanding digital economy.
Africa’s next digital challenge
The story behind South Africa’s fraud statistics is ultimately not about a country with a high fraud rate.
It is about the arrival of a new phase of cybercrime.
As AI makes scams more convincing and fraudsters become more adept at exploiting trusted platforms, the battle against digital crime is moving beyond fake emails and suspicious websites.
The next generation of fraud is targeting identities, relationships and trust itself.
For South Africa, and for a continent racing to digitise its economies, that may be the most important warning in TransUnion’s latest findings.
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