Global Cybercrime and Fintech Vulnerabilities: The Hidden Threat in Digital Marketplaces

Abstract 

Global digital commerce has grown at an unprecedented pace, driven by social media marketplaces and fintech platforms that enable fast and borderless transactions. However, this expansion has also fuelled a parallel rise in cybercrime, including digital fraud, identity theft, phishing scams, and unauthorised financial transfers. Weak verification systems, fragmented international regulatory structures, and the anonymity of cross-border payments have created new opportunities for criminal networks. This article analyses the international dimensions of cybercrime within fintech and online marketplaces, evaluates the strengths and gaps in global regulatory and judicial responses, and proposes constructive reforms to strengthen consumer protection. It concludes that harmonised regulation, platform accountability, and global cooperation are essential to creating a safer digital marketplace. 

1. Introduction

Digital marketplaces have become a powerful force in global commerce. Platforms such as Facebook Marketplace, Instagram Shops, TikTok Storefronts, WhatsApp trade groups, and online classifieds now facilitate millions of informal transactions every day. At the same time, fintech applications including PayPal, Venmo, Cash App, Revolut, GCash, M Pesa, and Paytm allow users to transfer money instantly across borders. This convergence of digital trading and financial technology has made commerce more accessible, but it has also increased exposure to sophisticated cybercriminal schemes.

Global enforcement bodies, including the Federal Trade Commission (United States), Europol (European Union), Action Fraud UK, and the Australian Competition and Consumer Commission (ACCC), consistently report rising digital fraud losses. These cases often involve fake product listings, impersonation scams, phishing links that mimic fintech platforms, and unauthorised transactions conducted through digital wallets. Despite this rapid increase in cybercrime, many legal frameworks remain outdated or insufficient. 

This article argues that cybercrime in fintech and digital marketplaces is not merely a technological issue. It represents a structural weakness in global regulatory frameworks, further exacerbated by fragmented enforcement, limited judicial capacity, and insufficient due diligence mechanisms. 

2. Research Methodology

This article adopts a doctrinal, comparative, and policy-oriented research approach. Primary sources include the Budapest Convention on Cybercrime, the EU Digital Services Act (DSA), the Payment Services Directive (PSD2), the Federal Trade Commission Act, the Singapore Payment Services Act, and domestic legislation from India, Kenya, and the United States. Judicial cases from multiple jurisdictions provide interpretive insight into platform liability and fraud disputes. Secondary materials include reports from the United Nations Office on Drugs and Crime (UNODC), the Organisation for Economic Co-operation and Development (OECD), Europol, national cybercrime agencies, and academic commentary on digital financial regulation. 

3. International and Regional Cybercrime Frameworks

The Budapest Convention remains the most influential global framework addressing cybercrime. It harmonises key offences such as computer-related fraud, identity theft, and unauthorised access. However, major global digital economies, including India and several African nations, remain non-signatories, limiting its universal effectiveness.

The European Union has introduced the Digital Services Act (DSA), which strengthens platform accountability by mandating seller verification, transparent content moderation, and robust fraud prevention systems. PSD2 further enhances consumer protection by requiring strong customer authentication for digital payments and establishing liability rules between consumers, banks, and fintech providers. 

By contrast, the United States lacks a unified digital marketplace regulatory regime. The Federal Trade Commission Act remains the primary tool to address deceptive and unfair practices, but regulation varies widely across states. This fragmentation creates opportunities for cybercriminals operating across jurisdictions. 

Fintech regulation in Africa is heavily shaped by Kenya’s M Pesa ecosystem, which revolutionised mobile money transfer systems. Yet identity verification gaps and SIM-card fraud remain key vulnerabilities. Singapore’s Payment Services Act stands out as a model, adopting stringent licensing, risk assessment, and anti-money laundering (AML) requirements for all digital payment operators. 

4. Judicial Interpretation

Courts worldwide are increasingly confronted with disputes involving digital payment fraud and platform negligence. In FTC v Amazon (2023), the United States District Court examined misleading commercial practices and inadequate consumer safeguards. The Court of Justice of the European Union (CJEU) has repeatedly held platforms liable where they fail to mitigate foreseeable harm, especially in cases involving fraudulent listings. 

Indian courts interpreting the Information Technology Act stress that intermediaries must exercise due diligence, especially when user misconduct is foreseeable. Kenyan courts, particularly in cases involving M Pesa mobile money fraud, have criticised telecom operators for failing to enforce robust customer verification mechanisms.

These judicial trends illustrate a global movement towards imposing greater responsibility on digital platforms and fintech providers, recognising that passive oversight is insufficient in an era of sophisticated cybercrime. 

5. Critical Analysis

The global rise in cybercrime targeting fintech and digital marketplaces is driven by structural vulnerabilities that are often overlooked. First, anonymous seller accounts allow fraudsters to disappear immediately after receiving payments. Many platforms do not require mandatory identity verification or credit checks, making it easy to create multiple fraudulent accounts. 

Second, fintech transactions are typically instant and irreversible, which limits the ability of consumers or service providers to reverse fraudulent transfers. The absence of robust dispute resolution systems exacerbates this problem. 

Third, cross-border criminal networks exploit regulatory inconsistencies. Offenders often operate from jurisdictions with weak enforcement, using VPN masking and digital wallets that are difficult to trace. 

Fourth, cybercrime units in many countries lack advanced investigative tools, digital forensics capacity, and inter-agency coordination. Meanwhile, digital platforms rely heavily on reactive reporting mechanisms rather than predictive fraud detection technologies. 

Together, these weaknesses create a global digital environment where cybercriminals face minimal risk and substantial financial reward. 

6. Recent Developments

Several jurisdictions have introduced reforms to address digital fraud. The European Union’s Digital Services Act and strengthened cross-border consumer-protection rules represent asignificant step toward harmonised digital regulation. The United Kingdom’s Online Safety Act expands intermediary duties, requiring platforms to manage and mitigate online risks. 

Australia’s ACCC has implemented nationwide anti-scam initiatives, while Singapore mandates multi-factor authentication and enhanced KYC practices across all fintech systems. India has significantly tightened SIM registration and digital KYC rules to limit identity-based fraud. 

Despite progress, these reforms remain nationally fragmented. Without unified global standards, cybercriminals simply shift to weaker jurisdictions. 

7. Way Forward

Effective global consumer protection requires coordinated reforms. The following recommendations aim to strengthen the digital marketplace ecosystem: 

1. Mandatory global digital identity verification for all marketplace sellers and fintech users.
2. Fintech payment freezing tools that temporarily pause disputed transactions before they become irreversible.
3. Enhanced authentication mechanisms, including biometric verification and risk-based transaction monitoring.
4. Platform-level Fraud Detection Units that analyse behavioural patterns and proactively block suspicious activities.
5. Cybercrime capacity building, including specialised training, digital forensics units, and cross-border investigative frameworks.
6. Strengthened international cooperation through INTERPOL, UNODC, regional cybercrime centres, and treaty negotiation.
7. Expansion of digital literacy initiatives, ensuring consumers are equipped to recognise fraud attempts, phishing links, and fake profiles.

These reforms represent a balanced combination of regulatory strengthening, technological improvement, and public education. 

8. Conclusion

Cybercrime within fintech systems and digital marketplaces is one of the most urgent emerging threats to global consumer security. The rapid evolution of digital commerce has outpaced global legal and regulatory measures, leaving billions vulnerable to financial exploitation. Strengthening international laws, enhancing platform accountability, improving fintech safeguards, and investing in consumer awareness are essential steps toward a secure global digital economy. 

References / Bibliography (OSCOLA Style) 

Council of Europe, Convention on Cybercrime (Budapest Convention, 2001). Regulation (EU) 2022/2065 (Digital Services Act). 

Directive (EU) 2015/2366 (PSD2). 

Federal Trade Commission Act 15 USC §§ 41–58. 

Singapore Payment Services Act 2019. 

FTC v Amazon.com Inc (2023) US District Court (W.D. Wash). 

UK Online Safety Act 2023. 

Communications Authority of Kenya, Mobile Money Regulations Report (2019).