B2B PAYMENT FRAUD CONTINUES TO GAIN MOMENTUM.

As new technologies come into our daily lives and the work place - supposedly making things easier - fraudsters are also becoming more tech savvy.

Fraud is quite prevalent in #b2bpayments and if you've never experienced fraud consider yourself one of the lucky ones. When businesses experience fraud the time and effort for resolution can take weeks - sometimes months.

According to a survey from the Association of Finance Professionals:

• Checks and ACH debits were the payment methods most impacted by fraud activity (66 percent and 37 percent, respectively).
• Sixty-eight percent of organizations were targeted by Business Email Compromise (BEC) in 2021, which is a sharp decrease from last year’s figure of 76 percent and the second lowest figure since AFP began tracking this data.
• Accounts Payable (AP) departments are most susceptible to BEC fraud, 58 percent of respondents report that their AP department was targeted by email scams.
• The majority of organizations (two-thirds) is validating payment beneficiary information either through their vendor/bank or by using an external service.

B2B Payment Fraud by Type

While CFOs and corporate treasurers have always been concerned about B2B payments fraud infiltrating their accounts receivable (AR) and accounts payable (AP) operations, that risk is more inflated today than ever before — and employees having access to corporate networks in a remote environment also raises risks.

Many businesses appear to be acutely aware that fraud is becoming a major obstacle - not just to grow business - but to maintain a business as usual mentality.

Unfortunately for some,?organizations that use manual solutions or wait until evidence of fraud emerges may naturally experience greater revenue loss due to human error or inefficient identity verification or vetting procedures.

Pymnts.com highlights the following;

• 71% of businesses plan to better digital solutions to minimize fraud.
• 47% of businesses choose not to onboard new clients due to fraud concerns.
• 46% of organizations using manual anti-fraud solutions said fraud concerns made it difficult for customers to work with them.
• Businesses that used proactive, automated solutions were the least likely to be impacted by fraud-related concerns

Lacking a comprehensive anti-fraud strategy model can limit business growth. Businesses must have a clear idea of what a successful anti-fraud strategy looks like and why modern digital solutions are essential for that success.?Manual, reactive strategy models tend to cost businesses more over time.

One very easy strategy to prevent payment fraud is to use virtual cards when paying suppliers.

Virtual cards are a non-physical card where, once used, the 16 digit number becomes permanently invalid, and can be used for only the exact amount - making it nearly impossible to hack.

Virtual cards also allow for easy reconciliation, reducing the AP teams manual processes significantly.

The good news is that more and more suppliers are accepting virtual cards as they also reap the benefits including receiving faster and more reliable payments and streamline their AR.?It can even incentivize more sales and higher order volumes.

Finally, there is no need to change any accounting software as virtual cards can integrate directly with your existing ERP platform.

Ernst Consulting Group is designed to educate and consult B2B companies on new and innovative Fintech initiatives. We provide Best-in Class customer experiences and partnerships allowing companies to minimize effort and maximize revenue and efficiencies.

Contact Information:

Jeffrey A Ernst - 815.354.6105 / [email protected] / www.ernstcg.com