How Digital Wallets and Online Bank Accounts Get Hacked

Digital wallets and online banking have completely transformed the way money is transacted. Using mobile apps, QR codes, and the internet saves time and effort. However, this convenience and speed also create opportunities for cybercriminals. In recent years in Nepal, there have been numerous reported cases of fraud and hacking targeting banks, financial institutions, mobile wallets, and digital payment platforms.

Phishing attacks are the most common method of hacking digital wallets and online banking accounts. In this method, criminals create fake websites or mobile apps that closely resemble real banking or wallet applications. They send deceptive SMS messages or emails, urging people to act immediately, and use social engineering to collect personal information. These messages often threaten account closure, loss of funds, or other urgent consequences to scare recipients.

Malware and spyware are also used to hack digital accounts. Hackers install remote management apps on mobile phones using various lures, promises, or incentives, or they place viruses and Trojan software on computers to monitor user activity. Tools like keyloggers record everything typed, including passwords, PINs, and other sensitive data, giving hackers easy access to accounts.

SIM swap attacks are extremely dangerous. Here, hackers trick mobile service providers into transferring a victim’s phone number to a SIM card under their control. Once they gain control of the number, they can access calls and messages—including two-factor authentication codes—making it easier to hack bank accounts, emails, social media, or other digital accounts. Hackers can capture OTPs and verification codes to take full control of accounts, often without the victim even knowing.

Public Wi-Fi networks can also be exploited to hack digital accounts. When users connect to unsecured networks for financial transactions, criminals can steal data. Through man-in-the-middle attacks, they intercept communications between users and websites or create fake Wi-Fi hotspots to lure people into connecting. Once connected, all digital activity is exposed to monitoring.

Weak passwords and social engineering are also primary causes of hacking. Many people use easily guessable passwords, like their name, birthdate, or simple sequences like 123456. Sharing personal information openly on social media helps criminals guess passwords, and information sometimes leaks through family or friends, making accounts vulnerable.

In Nepal, the use of digital wallets like eSewa, Khalti, and Fonepay and mobile banking services is widespread. These convenient services simplify daily life but also increase the risk of cybercrime. As digital transactions grow, criminals continue to develop new methods to target people’s financial assets.

Common Hacking Methods

1. Phishing
Phishing is one of the oldest and still effective hacking methods. Hackers send fake emails, SMS, or social media messages claiming to be from banks or wallet companies. Messages might say, “Your account will be blocked” or “Click here to claim a prize.” If the victim enters their username, password, or OTP on these fake links, the information goes directly to the hacker. In Nepal, eSewa and Khalti users have repeatedly reported receiving such fake OTP and login requests.

2. Malware & Keyloggers
Downloading unsafe files or apps, opening email attachments, or visiting hacked websites can install malware on your device. This records everything typed, takes screenshots, and can capture banking sessions.

3. SIM Swap Fraud
Hackers obtain a duplicate SIM card for your phone number, often through social engineering against mobile service providers. Once the SIM is swapped, OTPs for banking or wallet logins go directly to the hacker, allowing them to reset passwords and transfer funds easily. Two-factor authentication (2FA) may fail against this attack.

4. Credential Stuffing
This cyberattack uses large databases of previously leaked or stolen usernames and passwords. If you reuse passwords across sites, hackers can use leaked credentials to gain unauthorized access to your bank or wallet accounts. Using unique, strong passwords and enabling 2FA can reduce this risk.

5. Man-in-the-Middle (MITM) Attacks
MITM attacks occur when attackers intercept and manipulate communication between a user and a website. These are common on public Wi-Fi networks, allowing hackers to steal OTPs, login details, and session cookies. Using HTTPS, VPNs, and secure networks is essential to prevent this.

6. Fake Mobile Apps
Downloading banking or wallet apps from unofficial sources can be extremely dangerous. These fake apps often look identical to official apps but send all entered usernames, passwords, OTPs, and sensitive information directly to hackers, giving them access to your accounts. Always download apps from trusted sources like Google Play Store or Apple App Store.

7. Insider Threats
Insider threats come from employees, administrators, or officials within an organization who misuse access to internal systems. Dissatisfied employees or corrupt insiders may leak sensitive data or facilitate hacking, posing serious risks to financial and personal information.

Conclusion

Various organizations in Nepal provide support to victims of cybercrime. The Nepal Police Cyber Bureau investigates and takes action against such crimes, with technical experts analyzing digital evidence to track criminals.

Digital payments and online banking can be safe, but their security depends on your vigilance. Hackers continuously develop new methods, so alongside technology, keeping your cyber awareness up-to-date is essential.