Why Payment Fraud Has Grown Exponentially in B2B Transactions and How to Counteract It
Payment fraud has been an issue that businesses have had to face for centuries, but over the last few decades, the landscape has evolved. Whether it’s identity fraud, phishing, account takeover, or APP fraud, the methods that fraudsters use have become more complicated, intricate, and challenging for businesses to deal with.
Not only this, but the business landscapes being targeted have changed. At one point in time, payment fraud was an issue that primarily affected B2C organisations, but over the last few decades, the issue has grown exponentially in B2B transactions.
According to the 2024 AFP Payments Fraud and Control Survey Report, around 80% of B2B organisations were victims of payment fraud attacks or attempts in 2023, which was a 15% increase from 2022. In 2024, too, the trend of growing payment fraud only increased, and many experts are projecting it could even grow to 90% by the end of this year. So if you’re running a B2B organisation, how exactly can you counteract payment fraud?
The Reason Behind the Surge
Before we look into counteractive measures, let’s first take a look at why payment fraud has grown exponentially in the B2B field. The main reason has to be the increasing digitisation of B2B transactions. Over the last two decades, B2B transactions have largely moved online, with companies adopting digital payment methods, automated invoicing systems, and e-commerce platforms to make their sales.
As mentioned previously, the methods for fraudsters have evolved along with the B2B landscape, with the online space making it easier to exploit vulnerabilities with sophisticated tools and techniques. Unlike traditional payment methods, of course, digital systems can be breached through cyberattacks, phishing schemes, or malware, exposing sensitive payment details and allowing fraudsters to target companies with greater precision and scale.
As well as this, compared to B2C transactions, B2B transactions typically involve larger sums of money, which makes them a particularly attractive target for a single successful attack to yield high returns.
The payment workflows are also more complex, involving multiple layers of approvals, intermediaries, and reconciliations, and while this might seem like a challenge for fraudsters, it is this complexity that creates opportunities for fraudsters to insert themselves into the process.
With globalisation, cross-border transactions, and a lack of standardised fraud prevention also at play, the B2B landscape has become a lucrative hotbed for cybercriminals, and it’s up to the companies to defend themselves.
Counteracting B2B Payment Fraud
So how exactly can you do this if you’re running a B2B organisation? The first thing you need to recognise is that fraudsters are often using advanced, modern technology to pull off their crimes, so you will need to apply the same kind of technology to counteract them. If you invest in real-time fraud detection platforms that leverage AI and ML, for instance, you can begin to identify unusual transaction patterns, suspicious activities, and address the potential threats before they escalate.
We mention ML because this is the best way to future-proof your business. Since ML tech learns from patterns over time, it doesn’t just respond to known threats – it evolves with emerging fraud trends, detecting anomalies that may not align with historical transaction behaviours, but are predicted accurately to flag new methods before they cause significant harm.
Other counteractive methods include MFA – multi-factor authentication – which should be required for all employees accessing payment systems, accounts, or sensitive financial data. By adding an extra layer of security, such as one-time passwords or biometric verification, you can significantly reduce the risk of ATO, ensuring that even if an attacker obtains a password, they still can’t gain access without a second authentication factor.
Adequate training is similarly important. In another study undertaken in 2022, it was revealed that 61% of employees spend two hours or less on fraud training every year, with 11% not receiving any fraud training at all. In order to counteract common types of payment fraud – such as phishing or social engineering – it’s crucial to educate employees on all the latest fraud tactics, providing clear guidelines on how to identify fraudsters and protect user data. In the same way, it’s also important to communicate with clients, educating them on the importance of safeguarding their payment credentials, recognising phishing attempts, and ensuring they’re using secure methods when sharing information.
Conclusion
Putting in steps like this might not stop fraudsters from targeting your business, but it will put you in the best position possible to deal with those threats and keep your company safe. What’s more, customer loyalty is an integral part of running a successful B2B company, so if you demonstrate what you’re doing to keep yourself and your clients safe, you’re far more likely to keep them onboard even if an attack takes place. So as we’re starting 2025, we recommend you take payment fraud seriously, ensuring you remain proactive in the fight against cybercrime.
