FinTech Glossary

Definition

An unauthorised transaction is a payment or account activity completed without the account holder’s approval, often due to fraud, compromised credentials, misuse of access, or gaps in security controls and monitoring.

How Unauthorised Transactions Happen

Unauthorised transactions can occur through phishing, stolen OTPs, SIM swap, malware, or shared credentials. In businesses, they can also arise from weak approval rules, excessive permissions, or poor card controls. Some cases result from merchant errors or accidental debits, but the key issue is missing consent. Detection typically relies on alerts, transaction monitoring, and quick user reporting to the bank or service provider.

Why It Matters for Users and Businesses

Unauthorised transactions create financial loss, dispute workload, and trust issues. For consumers, quick reporting improves chances of recovery. For businesses, unauthorised spending can lead to policy violations, reconciliation gaps, and audit concerns. Frequent incidents increase operational costs due to investigations and support calls. In India, prompt action and clear documentation are important because resolution timelines can depend on reporting speed, evidence quality, and internal controls.

Prevention and Operational Controls

Prevention requires layered controls: strong authentication, limited permissions, transaction alerts, and real-time monitoring. Businesses should enforce role-based access, approval thresholds, and merchant category restrictions on company cards. Regular access reviews and quick deactivation mechanisms reduce risk. 

EnKash supports controlled spending through configurable limits, merchant restrictions, and approval workflows, which helps reduce unauthorised or out-of-policy spends at the point of payment. Clear transaction logs also support faster investigation, dispute handling, and audit readiness when exceptions occur.