Running a business is a full-time job, but according to PNC Solutions Advisor Glenn Davis, reviewing outgoing payments is the part-time job every business owner needs to perform with “a healthy level of suspicion.”

Today cyber threats come from numerous sources and business owners must remain vigilant to protect their businesses. According to PNC Senior Product Manager Chris Byers, it’s not a matter of “if” a business will be targeted, but “when.” Approximately 65% of organizations were victims of payments fraud attempts or attacks in 2022, according to the 2023 Association for Financial Professionals Payments Fraud and Control Report.[1]

There’s a reason for that high number. Byers explains that every payment a business makes to a “counterparty” (which can be a vendor, employee or any entity on the other side of a payment transaction) is an opportunity for an attack.

“When we think about every payment that needs to be made in a business’s day-to-day operation, there’s the opportunity for a scammer to attempt payment fraud,” said Byers. “We largely see imposter fraud, where a criminal pretends to be a trusted party to their target. Fraudsters try to trick business owners into divulging information or change payment instructions, so funds go directly to them. Even something seemingly safe like payroll can be subject to fraud.”

Good Cyber Hygiene: A difficult, but important, conversation

Byers and Davis are both experts in the fraud landscape, given their roles with PNC. Byers manages all aspects of PNC Account Verification Services, which is designed to help clients reduce the risk of payments fraud and improper payments by confirming details about their intended payment counterparties. Davis leads a team of subject matter experts in treasury management that’s focused on providing guidance to clients on the impact of cyber fraud and how to prevent it.

“I don’t like to be sensational when I’m talking to clients, or try to scare them,” said Davis. “But when it comes to this topic, you can’t compete in business unless you have a fraud prevention strategy and unless you have tools that can beat fraudsters at their game before they get to you.

What next? Knowing the available resources

According to Byers, PNC offers a suite of solutions that digs deep into a potential transaction to help identify an improper transaction.

"PNC Account Verification Services offers a solution that can help clients confirm the existence and true identity of a counterparty,” he said. “It can also help to determine their social media presence to ensure credibility, based on the availability of an email account. That’s just the basics of that service.”

Payments made by check, either electronically or on paper, create additional opportunities for fraudsters to compromise that corresponding account. Because every check shows an account and routing number, fraud can occur if it falls into the wrong hands. “We offer tools and services that allow our clients to mask that account number through the form of an alias,” said Byers.

That same concept can be used with credit card payments.

“Masking account numbers to make payments gives businesses the ability to pay suppliers using a credit card without furnishing the full credit card number,” said Davis. “The recipient of the payment instructions receives a notification that a payment is available and waiting to be processed. The Payee clicks on a link and is directed to a secure website to enter multi factor authenticating criteria known only to the payee. Once entered, the payee is furnished with the full 16-digit card number, expiration date and 3-digit Card Verification Value (CVV). Not only is the account number masked until the payee is authenticated, but the dollar limit of that card can be set to be the exact amount of that specific payment. After that card has been processed, the credit card number ceases to exist. It’s a one-time use.”

Payments via card offer much more control and mitigate fraud in other ways. When organizations use traditional commercial purchasing or corporate cards for travel and entertainment, they also are afforded the ability to limit per transaction amounts, daily transaction limits, and the types of merchants where a card can be used. These internal controls align with any organization’s accounts payable policies and controls to mitigate fraud.

Best protection from fraud evolution: Preventing it from happening

The threat landscape has changed considerably since the height of the pandemic, according to both Byers and Davis, and the percentage is still currently too high.

“We can give our clients access to additional intel, beyond just the payment itself. We can provide information about payment counterparties including their social footprint or any email accounts that exist,” Davis said. “That process should be adopted widely to prevent any evolution of the payments fraud landscape.”

According to Byers, the future holds more opportunity for ID proofing developments. That, he says, is going to give business owners confidence moving forward into the digital age.

“It’s going to be table stakes as the digital world evolves,” he said. “As we have fewer direct interactions with our payment counterparties, there will need to be a healthy level of suspicion, as well as an increased confidence and trust in the verification process. PNC is continuing to excel in that area for our clients.”