Awesome! We need more countries implementing systems like that. Once that happens, an international or at least EU standard is hopefully soon to follow.

I thought this was ubiquitous in Europe already: both countries I call home (Denmark and Portugal) have each had their own for a long time now.

Not in my experience, although I haven't done an insane amount or traveling. I've seen local payment systems in a handful of countries, but I don't remember any that were commonly used at POS. I know of a handful, for example, built by a few banks or a mobile network operator, but those have little market penetration due to only working with those providers or their partners (but of course not their largest competitor).

How do they deal with fraud/theft?

Well, the same you do with Credit Cards or other forms of electronic transfer of debts.

In most banks you must first authenticate your smartphone app by going to an ATM where you use your card and some sort of biometrics to authenticate along with your pin. The app can only be used after this first "machine" authentication.

There are also customer-customizable limits, the usual anti-fraud controls. Of course, there is a lot of scams involving people with less instruction, but it is not substantially different from the levels in other types of transfer/payment.

No different from what could be done and was done before with debit cards, credit cards and standard wire transfers.

Don't give fuel to the FUD.