The risk and compliance space for payment processing and e-commerce is dynamic. LegitScript uses its monitoring data and regulatory expertise to track trends across the commercial internet, and we compile and share our findings in our biennial high-risk trends guide.
Learn more about AI abuse, one of our top trends for 2025. Then download the full guide for a comprehensive overview of each trend.
The Top 10 High-risk Trends in Payment Processing and E-commerce
In this 24-page guide that has been fully updated, LegitScript covers advancing technologies, changing regulations, criminal innovation, and new products are all factors that impact the strategy and focus of risk and compliance teams.
What Is Generative AI Fraud?
Artificial intelligence (AI) encompasses a range of capabilities — one of which is generative AI.
This technology utilizes machine learning to produce original content based on user inputs. Its strength lies in its ability to rapidly generate content including text, audio, images, and video. Like many emerging technologies, generative AI or gen AI can be misused by those looking to defraud companies, scam consumers, and/or create illegal and brand-damaging products.
LegitScript has been monitoring the misuse of gen AI by fraudsters aiming to create convincing content to deceive payment service providers. Following are some of the use cases we see as most concerning to payments risk and compliance teams in the near future.
AI Can Help Create Fraudulent Merchant Applications
LegitScript already sees the increasing use of synthetic identity fraud, in which a criminal uses a blend of real and falsified information to establish a credit record under a new synthetic identity and ultimately apply for a merchant account. Fraudsters can now leverage AI to mass-produce fake merchant account details and applications. This could overwhelm payment facilitators that provide streamlined onboarding.
With just a few clicks, gen AI platforms can churn out nearly endless lists of fake phone numbers, addresses, cover letters, and other falsified information in a way that is effectively patternless — making these fraudulent applications harder to spot and block en masse.
AI Can Make Transaction Laundering Easier to Perpetuate and Harder to Spot
Transaction launderers almost always have bank pages, which are essentially front websites meant to fool payment service providers into believing that the applicants are selling innocuous goods or services. Since these websites serve no purpose other than to fool the payment processor, fraudsters typically create them quickly and sloppily from a template-based website builder.
New web design platforms, however, are harnessing AI to swiftly create customized websites in seconds. These highly tailored websites are likely to be more difficult to identify as fraudulent compared to the clunky template-based designs.
We expect that transaction launderers will take advantage of these sites to establish sophisticated and realistic front businesses at an unprecedented pace.
AI Can Create Brand-damaging and Potentially Illegal Content
While payments companies have primarily focused on fraud, LegitScript has also identified merchants offering generative AI solutions that can pose reputational risks. This is especially evident with merchants providing services that enable users to create realistic photos and videos. Without adequate content moderation, these tools can be misused to generate deepfakes to create misinformation, audio that impersonates individuals for scams, and produce pornographic content — including child sexual abuse material (CSAM).
The rise of computer-generated pornography is becoming a significant concern, attracting heightened attention from the media, the public, and card networks. LegitScript has already flagged many websites offering “AI girlfriends” that users can design, undress, and control. The reputational risks associated with such platforms are clear, and payments companies may face fines from card networks for facilitating access to non-consensual adult content that is computer-generated.
Stay Abreast of Trends With LegitScript
Just as fraudsters change their tactics, LegitScript adapts to changes in the risk and compliance space by developing new strategies and technologies that help you detect and combat AI fraud and other high-risk behaviors.
Our Merchant Risk Solutions help you stop problematic merchants from entering your portfolio while continually monitoring your ecosystem for problematic behavior. Our team of skilled analysts and policy experts track high-risk trends in the payments and e-commerce space to help ensure you stay compliant.
Want to learn about other high-risk trends for 2025 and beyond? Download our full guide now.
