Click, pay, kill: FATF highlights how terrorists are using e-commerce, online payments to fund attacks; two Indian cases cited

File photo of Indian soldiers examining the debris after an explosion in Kashmir's Pulwama district on February 14, 2019.

Terrorists are increasingly exploiting e-commerce platforms and digital payment services like Amazon and PayPal to fund and execute attacks – a disturbing new reality flagged in a comprehensive new Financial Action Task Force (FATF) report.

The global watchdog’s “Comprehensive Update on Terrorist Financing Risks”, released on July 8, 2025, lays bare how extremists are adapting quickly to modern financial tools, taking advantage of anonymity, digital loopholes, and global networks.

India figures prominently in two chilling case studies, including the Pulwama terror attack and the Gorakhnath temple attack, that show how terrorists leveraged online platforms to move money and procure explosive materials.

The evolving modus operandi

The FATF report, prepared in collaboration with UN CTED and France, exposes the growing trend of terrorist groups using electronic point-of-sale marketplaces (EPOMs) and online payment platforms to purchase weapons, chemicals, 3D printing materials, and more. These platforms, including Amazon, allow terrorists to “diversify fund-moving channels” while masking identities with pseudonyms and fake accounts.”

“These payment services also appear attractive for terrorist organisations for the low-cost and fast money transfer solutions they offer, with the possibility for enhanced opacity on initiators and beneficiaries,” the report notes.

Pulwama and Gorakhnath: India’s wake-up call

Two Indian cases cited in the report show just how real the digital terror finance threat is:

Pulwama attack (2019): FATF revealed that aluminium powder, used to intensify the blast that killed 40 Indian soldiers, was purchased via Amazon, a component critical to making the explosive device more lethal.

The NIA probe found that accused Waiz-ul-Islam used his Amazon account to purchase chemicals, batteries, and accessories for IEDs at the behest of Jaish-e-Mohammed (JeM) operatives. The goods were personally delivered to terrorists as part of the conspiracy.

Gorakhnath Temple attack (2022): In this ISIL-inspired lone-wolf attack, the accused used PayPal and VPNs to transfer over Rs 6.69 lakh abroad through at least 44 third-party international transactions, and received Rs 10,323 from overseas.

“Due to the suspicious nature of these transactions and the potential for TF, PayPal suspended the accused’s account, thereby preventing further illicit fund transfers,” FATF notes, citing India’s Ministry of Finance.

Pakistan’s role: Direct and indirect

Though not explicitly named, the report indirectly indicts Pakistan. It says: “Certain terrorist organisations have been and continue to receive financial and other forms of support from several national governments.”

It details “state sponsorship for TF purposes coupled with sanctions circumvention techniques through trade and smuggling mechanisms where the national government potentially plays a supportive role.”

India has long maintained that Pakistan-backed groups like JeM and LeT are key threats to global peace. The FATF’s own report acknowledges this, mentioning, “Pakistan-based groups Lashkar-e-Taiba (LeT), Jaish-e-Mohammed (JeM), and Tehrik-e-Taliban Pakistan (TTP) remain a global threat.”

India’s Department of Revenue has reportedly submitted three letters to the FATF demanding Pakistan’s return to the “Grey List”, citing its role in facilitating terrorism financing.

How terror financing web works

FATF warns that terrorist cells are now mixing old and new tactics, with many turning to trade-based money laundering, where goods are purchased on one platform, sent to accomplices elsewhere, and sold for cash to fund operations.

“Traded goods can indeed offer disguise to value being transferred from an accomplice to another member of the network... to finance terrorism,” the report says.

These goods may include even low-value items that previously weren’t on the radar of investigators. The opacity of transactions, the ease of digital money movement, and the use of crypto wallets, satellite phones, and even online gaming have made terror financing harder to detect.

Humanitarian aid and crypto now at risk

The FATF warns that humanitarian aid in conflict zones is being hijacked by terrorist groups. The watchdog urges NGOs and governments to put proportionate, risk-based measures in place to protect aid from being diverted.

Crypto transactions, often anonymous and fast, have become a key tool. Alarmingly, Pakistan has launched a crypto initiative linked to the Trump family, even as terrorist outfits allegedly use crypto wallets to launder money under the radar.

Global compliance still weak

The FATF report paints a bleak global picture. It finds that: “69% of jurisdictions assessed by the FATF and the Global Network exhibited major or structural deficiencies in effectively investigating, prosecuting and convicting TF cases.”

Despite more sophisticated surveillance, terrorists are still a step ahead, exploiting regulatory weaknesses, inconsistent international cooperation, and slow response frameworks.