Payment fraud is devastating for any business, but especially for small businesses that don't have the funds to lose. Luckily, there are a few steps you can take to ensure you have done everything possible to protect against becoming a victim of payment fraud in your business.In this article, we will explore some of these things now.
Due Diligence
One of the biggest things you can do to protect yourself and your business is due diligence.Firstly, if you are unfamiliar with the supplier that you are dealing with, it's worth checking out if they have any reviews online. This will help you avoid dealing with unscrupulous businesses before sending any payments to them.
As well as reviews, it's also worth checking out if the business has social media pages and if those pages are updated regularly. Active businesses will often update their social media regularly to let their customers know what they are up to. If you are using a new supplier, it is worth looking at their socials to see how they interact with their other customers orsee if they have reviews on sites like Trustpilot.
Payment Type
When sending a payment to a new supplier you have not dealt with before, it's worth thinking about how you plan to send that payment.If a company is insistingon something like Western Union as a payment method, for example, then this is potentially a very bad sign. Some payment methods offer more protection than others.Paying via credit card offers you more protection than paying via debit card. Payment services such as PayPal also offer a certain level of protection against fraud.
However, if you're looking to save on fees then usually bank transfers are a cheaper option. This is because credit cards can often come with a high-interest rate and services like PayPal often have high transaction fees.Bank wire transfers are instant payments, which often come with a fee. While this is usually the most common payment form for a business, it's not always the best option.
ACH paymentsare similar to bank transfers, but the fees are significantly lower and often even free with some providers. The only downside is that it takes a little longer than a traditional bank transfer.However, when it comes to fraud prevention, this slight delay of a couple of days canbe beneficial. It means that you can easily reverse the payment if you discover that the vendor is not genuine.This is very difficult to do with a traditional bank transfer.
Account Verification
There are also some services out there that offer an account verification process.This will allow you to check that the company is who it says it isbefore you send the money, giving you great peace of mind in making the transfer.
Envestnet | Yodlee is one such business that does this, and the real-time account verification process is almost instant, meaning you can progress with your business as quickly as possible. Envestnet | Yodlee also offers great ACH payment solutions, so if you're interested in learning more about this, head on over to their website and check it out.
In general, if you take steps to protect your business from fraud with good preparation and research, you should find that you are much less likely to become a victim of it.
Taking steps to prevent such action is often cheaper and faster than trying to recoup lost funds afterward, so always ensure you protect your business with good organization and a good process for vetting new suppliers before making the first order.
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