In a major upgrade to online payment safety, PayPal has introduced an AI-powered scam alert system to prevent fraudulent transactions. This tool, built with adaptive artificial intelligence, will intercept suspicious payments in real time, offering users better protection from digital scams.
According to PayPal’s Senior Vice President of Global Fraud Prevention, Yigit Yildirim, the new tool is designed to outsmart cybercriminals who increasingly use generative AI to commit fraud. “We’re combating AI used by bad actors with smarter AI used for good,” he said.
The new system will first roll out across PayPal and Venmo in the US, before expanding globally. It uses dynamic machine learning models that process billions of data points to identify even the most subtle signs of fraud.
Unlike traditional alerts, which send the same message to every user, the updated tool responds based on risk level. Low-risk activity triggers a soft alert, asking the user to double-check. But high-risk transactions can be blocked immediately.
Yildirim explained that this helps avoid alert fatigue. “If users see the same generic warning repeatedly, they start ignoring it. This system adapts to user behavior and context,” he added.
This move comes as cybercrime continues to grow more complex, with hackers leveraging AI tools to imitate human behavior and trick users into sending money or sharing private data. PayPal’s AI models can detect new scams based on patterns from past attacks, even if the system hasn’t seen the exact fraud format before.
The technology behind this innovation is adaptive AI, which learns from evolving scam trends. These continually learning models allow the system to predict and detect fraud that hasn’t yet been flagged globally.
While PayPal hasn’t disclosed its fraud statistics, the decision highlights how financial tech companies are now relying on AI not just for efficiency but for security.
For more on tech innovation reshaping safety, read how a Pakistani startup is using smart tech to support Gaza’s war survivors.
