This new study shows that B2B payments fraud is a growing concern for C-suite leaders this holiday season, with nearly two-thirds of businesses having experienced a business payments fraud incident in previous years.
B2B payment fraud lurks in the shadows year-round as tools and threat actors become more sophisticated, creating a significant problem for a business’ bottom line. While the winter holidays are a time for celebration, connection and rest for many, it’s no vacation for cybercriminals on the prowl for businesses to exploit. With companies facing a relentless stream of cyberattacks and threats, unfortunately ‘tis the season for business payment fraud.
The business payments security pioneer Trustmi recently worked with the third-party survey platform Pollfish in October 2023 to find out how cyberattacks on business payment processes change during the holidays and how business leaders are responding. The survey reached 509 buyers/purchasing agents, chief financial officers, and president/CEO/chairpersons of organizations that process more than 1,000 invoices or payments per month. Here are the results of the 2023 Trustmi Business Payments Holiday Survey.
According to Trustmi’s research, business payment fraud is a growing concern for CEOs, CFOs and corporate business teams this holiday season, with incidents on the rise and leaders rolling out new security measures to thwart attacks. Key findings of the survey include:
Business leaders have heightened concerns around their business payment process during the holidays, with 75% saying they’re more concerned about fraud this season compared to other times of the year. The business payment process is ripe for issues and roadblocks, but when asked about what their top concerns are during the holidays, business leaders said fraudulent activity came in first (36%), followed by payment delays (28%) and payment errors (22%).
How are these payments made? When asked about which payment methods the business generally uses to pay vendors and suppliers, respondents said credit cards were the top choice (57%), followed by Paypal (43%), digital wallets (43%), wire transfers (41%), real-time payments (37%), checks (31%), Swift (26%), ACH (25%) and SEPA (24%). Coming in at the bottom of the list was Blockchain at 21%.
End of year business initiatives and activities bring about a significant rise in business payments, with 72% of survey respondents reporting that they see an increase in the number of payments during the holiday season.
But concern isn’t just hypothetical; respondents’ fears are grounded in experience, with 63%--nearly two thirds–saying their business has experienced a business payments fraud incident specifically during the holidays.
The holidays are hardly a vacation for employees engaged in B2B payment processing, with 55% of respondents saying they see an increase in workloads during this period. This increase in transaction-related tasks could inadvertently add to the likelihood of fraud incidents, as overburdened and distracted staff might overlook crucial details or miss sneaky tactics used by threat actors to access funds or sensitive financial information.
With rising threats and over-extended workers, there are clear themes to the payment fraud schemes and cyberattacks business leaders tend to see during the holidays. Business Email Compromise (BEC) attacks ranked highest (49%), in which threat actors gain unauthorized access to email accounts and then use this access to initiate fraudulent activity.
While BEC was selected as the leading fraud scheme, this was followed by phishing scams (44%), spoofing (38%), executive impersonation (36%) and invoice manipulation (36%), indicating that fraudsters engage in a variety of tricks and tactics to steal funds from businesses.
To combat these threats, business leaders are taking proactive steps with 70% having already implemented additional security measures for vendor and supplier payments during the holiday season, and 11% still considering extra measures.
Some of the top ways leaders are combating business payment fraud during the holidays include conducting special employee training (59%), adding more resources to verify payments are correct (50%), and utilizing advanced fraud detection and monitoring systems (50%).
Fraudsters never take a break for the holidays, and their attacks on business payments will only become more sophisticated with time. The end of the year marks a strategic time for business leaders as they wrap up initiatives and plan for the coming year. And because many teams are kept busy with several activities that see increased volume, this opens the door to vulnerabilities and cyberattacks. To combat the never-ending threats, companies must stay several steps ahead with advanced technology that protects the entire payment process from start to finish.