Tag Archives: payment fraud risk


8 Best Practices for Mitigating the Risk of Payments Fraud

If it feels like your accounts payable department is under siege by fraudsters, you are not alone. Payments fraud is at an all-time high. Worse, it’s not just your checks that are at risk.  Fraudsters are using new tools and sophisticated schemes to infiltrate electronic payments to suppliers.  The good news is that eight best … Read More

Paymerang and Kaplan Partner to Tackle Payment Fraud

How can you protect your organization against payment fraud risk? Paymerang has partnered with Kaplan, one of the world’s largest and most diverse education providers, to share more about the risk of payment fraud. In a jointly produced video, Paymerang CEO, Nasser Chanda, addresses the risk of payment fraud and what organizations can do to shield their … Read More

8 Best Practices for Mitigating the Risk of Payments Fraud

If it feels like your accounts payable department is under siege by fraudsters, you are not alone. Payments fraud is at an all-time high. Worse, it’s not just your checks that are at risk.  Fraudsters are using new tools and sophisticated schemes to infiltrate electronic payments to suppliers. 

The good news is that eight best practices can help organizations mitigate their fraud risk. 

Checks can easily be intercepted, white-washed and cashed, leaving buyers with the expense of investigation, the cost to re-issue checks, and losses, but there are steps that can be taken to reduce payment fraud risk such as using Positive Pay.   

But that doesn’t mean that paying suppliers electronically is without risk. Automated Clearing House (ACH) debit fraud is at all-time peak and shows no signs of slowing down. Business E-mail Compromise (BEC) attacks have resulted in significantly higher levels of wire transfer fraud. These sobering stats are from the Association of Finance Professionals’ (AFP) 2019 Payments Fraud and Control Survey

An eye-popping 78 percent of all organizations experienced attempted and/or actual payments fraud in 2017, AFP’s 2019 Payments Fraud and Control Survey finds. Eighty percent of organizations with at least $1 billion in annual revenues experienced attempted and/or actual payments fraud.

Ninety-two percent of organizations say payments fraud costs them half a percent of revenue. Most of these losses can be attributed to outside fraudsters via forged checks, stolen cards, and BEC schemes that impersonate legitimate suppliers and quickly move funds out of bank accounts. 

How to mitigate payments fraud

It is time for organizations to regain the upper hand in thwarting fraudsters. 

The following best practices will help your organization mitigate its risk of payments fraud:

Use check positive pay:  Positive pay isn’t new, but it is effective. The process matches the account number, check number, and amount of cashed checks against a list provided by buyers. Checks that don’t matched are automatically flagged for review.   

Better manage supplier banking information: Supplier banking information is a tantalizing target for fraudsters. Work with an electronic payment solutions provider with a proven and multi-layered approach to gathering, verifying, storing, and continuously updating supplier banking data. Ensure that the banking information provided by suppliers matches key data in your supplier record, such as their name and address. Ask for a letter from the supplier’s bank or a voided check to verify the supplier’s identity. And validate via telephone all contact and/or banking information update requests, to thwart potential BEC schemes.

Benefit from a ‘For Benefit Of’ or FBO account: Look for an electronic payment solutions provider that holds and disperses funds from FBO segregated accounts at a reputable bank.  Especially designed to handle funds intended to go to another party, FBO accounts provide clear instructions as to who should receive funds, reducing the chances of interception.

Ensure control over your payments: Without the proper controls, organizations can never be sure who is approving or initiating payments. Best-in-class electronic payment solutions organizations ensure control over payments with pre-defined system permissions and privileges, configurable business rules for approvals (including multiple levels of approval for high-dollar transactions), separation of duties and chain of custody assurances, complete audit trails of all activity, and administrative controls for security settings. Some of these solutions can also identify duplicate payments to suppliers before they go out the door.   

Keep sensitive data out of harm’s way: Keeping sensitive data from the prying eyes of fraudsters is a key step in mitigating potential risks. Two-factor authentication enables organizations to restrict system access. And advanced encryption technology makes payment information unreadable to unauthorized users, further protecting digital data confidentiality.

Get insurance: Across the enterprise, organizations use insurance to gain peace of mind.  Supplier payments should not be an exception. Some electronic payment solutions providers maintain coverage with highly rated insurers for general liability, errors and omissions, employee theft, forgery, computer fraud, funds transfer fraud, currency fraud, and credit card fraud. Leading providers maintain insurance that covers up to $1 million per occurrence.

Pay suppliers via virtual cards: Virtual cards are the most secure payment method. How can this be? Virtual cards don’t require the distribution of physical cards to far-flung staff; the cards are plastic-less. Importantly, a virtual card number can only be used once, and is only good for a set time period. Organizations can also restrict virtual card transactions by amount, supplier and SIC code. And virtual card transactions must go through an accounts payable department for approval, just like any other invoice. Finally, suppliers only receive 10 of the 16 digits for a virtual card transaction, and eventually those numbers disappear. 

Reconcile your payments: Traditional approaches to paying suppliers make it so burdensome to reconcile payments (think logging into multiple portals and downloading multiple spreadsheets) that many organizations can’t keep up with it. This leaves the door open to fraudsters. Leading electronic payment solutions reconcile every supplier payment daily.  And leading payment solutions provide complete audit trails of all system activity.

New technologies and new schemes are creating new fraud risks for organizations. Leveraging the eight best practices above will help your organization mitigate its vulnerabilities.

Want to learn more?  Contact us today to arrange a free, no-obligation consultation.

Paymerang and Kaplan Partner to Tackle Payment Fraud

How can you protect your organization against payment fraud risk?


Paymerang has partnered with Kaplan, one of the world’s largest and most diverse education providers, to share more about the risk of payment fraud. In a jointly produced video, Paymerang CEO, Nasser Chanda, addresses the risk of payment fraud and what organizations can do to shield their organizations from fraud.

What is Payment Fraud?

Payment fraud is any type of false or illegal transaction perpetrated by a cybercriminal. In a recent Kroll survey, 84% of financial professionals surveyed reported at least one incident of payment fraud, which is up from 82% reported in 2016 and 61% reported in 2012. Moreover, 86% of respondents reported at least one cyber incident or information data theft, loss, or attack within the last twelve months.

The Kaplan/Paymerang video helps finance professionals assess risk and assist in implementing preventative and protective measures.

An example of payment fraud is seen in a Texas School District that recently fell victim to a phishing scam that cost millions. Phishing scams are emails designed to trick users into handing over personal information. The school district is expected to recover some of the funds as the investigation into the scam continues.

Do you know how to build a resilient organization, ready to handle the growing threats of payment fraud?

Payment fraud risk is a very real threat to organizations. One slip-up in ACH processing or wire transferring could cost millions of dollars and result in significant embarrassment for finance teams. If you have money and secure data, no matter your company size or industry—you are at risk. The Kaplan and Paymerang partnership aims at educating finance professionals on how to navigate those risks.

To learn more about how to protect your organization from payment fraud, watch this video.