Business-to-business-B2B payments fraud has become increasingly sophisticated in today’s technologically advanced global economy. Additional worries have been raised as a result of recent events occurring all around the world.
We have developed a practice of assisting with distant work, for example. Accounts payable automation security issues occur when it comes to maintaining best practices, regardless of whether the system is located on-premises or in the cloud.
Continued reliance on time-consuming manual operations, on the other hand, leads to the waste of time and money owing to unavoidable errors, resulting in increased expenses for the company.
In what areas of the realm of business-to-business payments is fraud now taking place?
- Hacking into a company’s email system is the most often used fraud tactic today. A genuine email is sent out, and email accounts are obtained by social engineering. Then the attacker demands that a payment be made by another means, which the recipient refuses to do. This attack targets people who manage financial transfers on behalf of businesses.
- Because some businesses don’t give up paper checks as a payment method, check fraud is also prevalent, and this practice lends itself to a range of modern fraud schemes and techniques, which are detailed below.
- Using transfers for fraudulent purposes is also on the increase. As paper checks become more outdated in office drawers around the country, online transfers for business-to-business payments are becoming increasingly popular. Transfers made online are easy, inexpensive, and straightforward to complete.
- Transfer fraud, on the other hand, is becoming increasingly prevalent. It has the potential to overtake credit card fraud – a widespread way of B2B payment fraud over the next decade. Consumer Sentinel Network 2020 Data Book report states that although credit cards account for the vast majority of payments made nationwide, ACH and wire transfer fraud account for twice as much money lost as card fraud.
What are some of the ways that digital payments can assist in lowering the risk of fraudulent activity?
With digital payments, they are often handled by only two people: the payer and the payee (or recipient). Digital payments, as compared to older means, represent a significant rise in security.
On top of all that, digital payments establish a digital fingerprint that may be used to monitor the payment throughout its entire life cycle.
Identification of the individual(s) who had access to the digital payment and are done with it are both fairly straightforward questions to answer in this situation. Even in the event of an issue occurring, the finest digital payment systems make that information readily available so that it may be identified early in the process and prevented.
Another advantage of using digital payments is that the controls are separated between the parties engaged in the transaction.
Organizing mechanisms to prevent a single person from having access to all of the information and tools necessary to perpetrate large-scale fraud is something business owners can do.
Using digital payments to combat both external frauds done by third parties and internal fraud performed by workers, fraud may be reduced in both cases.
What precautions should businesses take to reduce B2B fraud?
- Employees with access to your banking and payment information are frequently the target of payment fraud scams, so having internal procedures and controls in place is critical. If you set in place the required rules and processes, they can act as your first line of defense against payment fraud.
- Consider connecting your business with a payment system that has a strong risk management engine and a track record of successfully dealing with fraud. Pay.com offers a wide range of payment options and this may provide your customers more confidence and peace of mind when you manage their personal information.
- To remain competitive in a tech-fueled global economy that places a high focus on green practices, eliminating paper is a fundamental goal. As a result, account payable automation is a very efficient way to get rid of paper checks and invoices.
- Fraud and irregularities from outside suppliers at the checkout. To minimize external fraud and anomalies, it is necessary to rigorously examine suppliers and invoices. Recognizing phony supplier accounts and email addresses, for example, may halt fraud in its tracks and prevent it from spreading.
- Online transactions should have the following security features: to avoid online payment fraud, security measures such as two-factor authentication and CAPTCHA must be used. While it could be a bit inconvenient for clients, they have become accustomed to and enjoy it.
- Most of the time, virtual cards eliminate the risk of human mistakes. The one-time-use virtual cards are a huge benefit when processing business-to-business payments because they are only used once before vanishing forever. Company owners don’t have to be concerned about the transfer of corporate credit card numbers thanks to the usage of virtual cards.
