Businesses Need Proactive Anti-Fraud Strategies to Ensure Growth

Now that Paycheck Protection Program loans have dried up, we’re seeing an overwhelming surge of intent of fraud, TreviPay CEO Brandon Spear writes in the PYMNTS eBook “Baseline 2022: What the Next Six Months Holds,” and that’s making comprehensive cybersecurity measures more important than ever.

It’s accurate to say that 2022 has been just as unpredictable as the years prior and it continues to be difficult to forecast what the next six months will hold. A recession seems quite probable. We’re seeing a negative impact on consumer stocks and spending has dropped. Families are making harder choices about how they spend their disposable income. All this coming on the heels of two years of historic spending makes it more difficult than ever for retailers and other businesses to properly plan.

While it’s impossible to prepare for every unknown, there are steps that businesses can take to protect themselves and their bottom lines. Fraud has always been an issue that companies have had to think about, but the pandemic diverted fraudsters’ attention. With the amount of money that was flowing into the economy from stimulus, loan and bail out packages, these bad actors strayed from their normal hunting grounds. In fact, U.S. News & World Report recently reported that tens of billions of dollars may have been awarded to fraudsters as part of a COVID loan program overseen by the U.S. Small Business Administration and aimed at helping small businesses.

During this same period, businesses and merchants, especially those in the B2B space, scrambled to get their eCommerce offerings up and running. For many B2B companies, this was the first time they had made their products and services available online. Generally, more online customer acquisition is a good thing, but it can be difficult to manually onboard customers that you’ve never interacted with before. These are customers you know nothing about, including their previous payment histories. It means that companies need to be thoughtful about who they onboard and what credit lines they feel comfortable offering while also ensuring their onboarding process is scalable as they grow.

Now that Paycheck Protection Program (PPP) loans have dried up and we’re not experiencing that steady flow of government funds, we’re seeing an overwhelming surge of intent of fraud, especially business identity theft and application fraud. It serves as a reminder for businesses that have been in the eCommerce space for a while, but it’s also a wakeup call for B2B businesses that took their offerings online quickly at the onset of the pandemic.

Research that TreviPay recently conducted with PYMNTS showed fraud is holding many businesses back from reaching their full potential. In fact, nearly half (47%) of B2B businesses have chosen not to onboard new clients because of fraud concerns. This same research found that organizations that use manual fraud 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. This, plus rising working capital costs puts tremendous pressure on smaller and mid-size businesses. We all need to be aware of these issues and plan accordingly by enacting a proactive anti-fraud strategy that provides transparency across all transactions.