Common PayID Fraud Schemes – All You Should Know

In the last couple of years, the number of people in Australia opting for PayID transactions has massively increased.

According to Katrina Stuart, the Managing Director of NPP Australia, there are currently more than 11 million registered PayID users in the country. Some Aussies choose this payment method to shop at stores, some find it convenient to use PayID at, and others just like the ease of transferring and receiving funds. 

However, with the increasing popularity of PayID, the number of hacks, fraud, and malicious acts targeting its customers has also skyrocketed.

If we look at the data provided by the PayID team itself, we can see that during 2021 alone, Australian businesses and consumers lost over $200 million to scammers. In most cases, malicious actors pretend to be another person or company (utility company, ATO, Centrelink, etc.). They then tricked people into transferring funds into a different account.

Such cases have surely aroused a big wave of concern among PayID users. And the question of whether or not they can safely make online transactions with PayID becomes a priority. 

We highlighted all the core PayID fraud schemes scammers massively use and also shared some essential tips for protecting your accounts. So, let's get started.


Most Common PayID Scams – A Quick Look

According to NAB (National Australia Bank), the total number of customer scam reports in 2023 has grown 38% compared to the previous year. But how do fraudsters succeed in their schemes, and what methods do they use to trick PayID customers? We have outlined the key ones below. Let's have a look.


One of the most common schemes is impersonation. It's when scammers introduce themselves as someone else you can trust, like a government organization, PayID team member, etc. 

In most cases, cybercriminals trick people into revealing their personal or banking details with the help of phishing attacks. They just send fake emails or text messages with a malicious link. After clicking on the link, you will automatically give out all your information or, what's worse, completely lose access to your PayID account.

Selling or Buying Items Online 

This kind of scam mainly targets users who try to sell their second-hand items on online platforms like Facebook or Gumtree. 

Based on various customers' stories, the scheme happens as follows: The malicious actor gets in touch with you to buy your listed item and offers to use PayID for payment. Afterward, they just claimed that there was a problem with the transfer as you don't have a PayID business account. 

As for the next steps, they just sent a fake email that seemed to be from PayID and asked them to send additional funds to upgrade their accounts. 

The first sign pointing to a problem is the speed at which such potential buyers respond. According to Beth Keating, one of the customers who stumbled upon PayID scams, some take only less than 10 seconds to respond. This shows that scammers use special software to trawl multiple sites for listings.

Another red flag is their unwillingness to inspect the items they want to purchase. They typically say they are not in the city, so they can't check the goods, and encourage you to put the Sold sign immediately.

Overpayment Fraud

Another type of PayID fraud many users complain about on Reddit is the overpayment scam. It is when the customer buying your TV, coach, etc., tells you that they have made the payment but accidentally overpaid you. As such, they ask for the difference back and urge you to transfer the overpaid money. 

They may also provide you with some fake screenshots as proof of the successful “money transfer”. 

Real-Life Examples of PayID Scams

Here, let's take a quick look at some real cases of PayID fraud that happened to various people who tried to sell their items online. 

  • One user on Reddit with the name Kraxx-TG shared his story of encountering PayID scams. According to him, he put an ad on Facebook to sell his Gaming PC. Right after it was posted, around five minutes later, he got two messages from different individuals with similar content. They said they want to pay only by PayID and can't pick up the item themselves. Instead, they will send one of their relatives who is available. These stories seemed odd and strangely lookalike to the seller, so he just googled and found out about PayID fraud schemes.
  • Another case is also about selling goods on online platforms. The user with the nickname Sun-Moon-Stars on Reddit was asked to provide a PayID for the transaction. He gave the buyer his mobile number, and they replied, saying there were some issues with the transfer and sent screenshots. Next, they asked for the seller's email address and once received, told to check all folders for a transfer message, including the Spam. 

    The interesting part here is that Sun-Moon-Stars really found an email in the Spam section stating that he had received a payment of $100. However, it also included a text saying that as his account is not business, he needs to pay $500 to upgrade it and get back $600. Fortunately, Sun-Moon-Stars tried to search for information on the Internet and discovered it was PayID fraud.
  • The Reddit user Efficient-Quail-4530 encountered another situation. He received an email claiming to be from PayID. It said he needed to upgrade his account by clicking on the provided link. Fortunately, this person was aware of similar schemes, so he didn't click on any links that could “steal” his banking and personal information.

Measures Against PayID Fraud 

online security

With the rising number of PayID scams, the necessity for advanced security and protective measures becomes a must. According to Katrina Stuart, the payee's confirmation phase they use in processing PayID transfers has been a good help in securing at least one in four transactions. As you may already know, when making a payment and transferring money to another person's PayID, you can see their names on your screen beforehand. This massively reduces the possibility of mistakes and prevents unwanted transactions.

Moreover, to fight fraudsters, NPP Australia works closely with partner financial institutions and banks to increase awareness of PayID services and policies.

Helpful Tips to Protect Yourself from PayID Fraud

The most direct way to secure yourself from possible fraudulent activities is to get acquainted with the main tricks and schemes scammers use. Here are some helpful tips and advice from Chris Sheehan, the executive of NAB (National Australia Bank), worth considering.

  • PayID doesn't have any fees. If you are asked to pay a commission for upgrading your account, it’s definitely a trap. So, make sure to avoid such deals.
  • PayID never sends direct messages to customers, as it is managed by your bank. So, ignore any calls, emails, or text messages claiming to be from PayID.
  • Turn on two-factor authentication when registering a bank account and linking it with your PayID. It will significantly reduce the chance of third parties accessing your account.

In addition, most banks and financial institutions partnering with PayID, such as Westpac Bank, Regional Australia Bank, etc., take extra measures to protect their customers from possible scams. These cover launching public awareness campaigns, implementing various safety tools and limiting payments to high-risk channels.

Author - Nurlana Alasgarli
Nurlana Alasgarli           

Content Specialist

Nurlana Alasgarli is a professional copywriter with more than 6 years of creative writing experience. Having lived and experienced all over the world, there are many writing genres that Nurlana follows, including nature, arts and crafts and the outdoors. Nurlana brings life to content creation, captivating her readers.


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