Visa and PayPal face rising student fraud risks

The warning lands against a backdrop of persistent consumer fraud, including a recent case in which a victim lost Dh84,000 in a fake lottery scheme tied to a spoofed phone number. Authorities have said such schemes often begin with unsolicited messages, phony prizes or urgent requests for personal information, then escalate into payment demands that are hard to unwind once sent.

For investors, the story underscores why fraud prevention remains a cost line and a growth constraint for payments processors such as Visa and PayPal. Both companies say in SEC filings that criminals keep trying to misuse payments platforms through fictitious accounts, stolen identities and evolving scams, forcing constant spending on detection systems, compliance and account controls.

Visa shares have held near $367.38, above the 200-day moving average around $335.86, while PayPal has recovered to $55.04 after a brutal slide earlier this year and remains just under its 50-day moving average of $56.69. That divergence reflects a market that still rewards scale and resilience in payments while punishing weaker growth and higher fraud exposure.

The broader narrative is that scam activity is becoming more sophisticated at the same time as cross-border education and labor migration keep rising. That makes students, parents, banks and payment firms all part of the same risk chain — and leaves the next round of earnings, fraud disclosures or enforcement actions as the main catalyst for the sector.