Recent data from PYMNTS shows many companies aren’t accepting new business due to a fear of potential fraud. The reasoning behind their hesitance may be justified: 98% of businesses experienced fraud, with retailers, manufacturers and marketplaces losing an average of 3.5% of their annual income to successful fraud attacks.
Risk And Resilience: A Business Fraud And ID Theft Report, a PYMNTS and TreviPay collaboration, reveals the impact of fraud on business-to-business (B2B) growth and how businesses are attempting to manage their concerns of fraud and revenue loss. The report is based on a survey of 150 executives at companies with $10 million to $1 billion in annual revenues, conducted between Nov. 3 and Nov. 26, 2021.
According to our research, businesses’ fear of fraud slows business even when a new customer has been won. The recent proliferation of fraud has resulted in tangible negative outcomes for many businesses. Forty-seven percent of businesses surveyed were unable to onboard clients due to a fear of fraud and a belief that their existing anti-fraud measures would be insufficient.
In addition, businesses are finding that their existing customers are feeling the impact of their fraud concerns. Slow and inefficient anti-fraud methods were to blame for 46% of organizations using manual anti-fraud solutions, stating that their customers found it hard to work with them.
Most businesses are seeking more efficient methods of fighting fraud. Seventy-one percent of organizations plan to implement new digital solutions to prevent fraud, and 49% say finding a better digital solution for fraud prevention is their primary prevention plan. Those that have reported success in implementing automated, digital anti-fraud solutions show the highest satisfaction levels with their current anti-fraud strategies.
Additional key findings include:
• Nearly half of all businesses are in the process of developing an anti-fraud plan. Forty-nine percent of businesses are actively addressing challenges related to fraud prevention, with most using payment card verification as a fraud prevention method.
• More than half of retailers refused business due to security fears. Our research found that 54% of retailers failed to accept new business due to fraud concerns.
• A minority of businesses have a thorough onboarding process for new business partners. Just 19% of merchants rely on multiple verification methods for new partners.
To learn more about the impact of fraud on B2B business growth and how businesses are attempting to balance their desire to expand with security challenges, download the report.