Study Finds Payment Certainty Becomes the New Fraud Strategy

§ 01 Executive Snapshot

• What: A shift in B2B payment fraud prevention strategies from recovery to proactive certainty measures.
• Who: PYMNTS, Plaid, corporate finance teams, accounts receivable departments.
• Why it matters: Establishing confidence in transaction validity is crucial as real-time payments increase the risk of fraudulent settlements.

§ 02 Key Developments

• 86% of firms that detect problems before settlement use step-up authentication for high-risk transactions.
• Organizations are increasingly embedding verification into payment workflows to assess risk continuously.
• The shift in focus is towards determining payment trustworthiness before funds leave an account.

§ 03 Strategic Context

• Historically, fraud prevention focused on minimizing losses post-transaction, reflecting slower payment processing systems.
• The rapid evolution of payment technologies necessitates a change in how firms approach both fraud and payment certainty.

§ 04 Strategic Implications

• Immediate market consequence includes a growing adoption of risk-based verification models, enhancing fraud control without disrupting legitimate transactions.
• Long-term implications suggest that businesses will need to prioritize knowing when not to execute a payment, rather than merely moving funds faster.

§ 05 Risks & Constraints

• Potential risks include the challenge of integrating new verification technologies into existing payment systems without causing friction for legitimate transactions.
• Dependence on consumer payment innovations may limit the effectiveness of fraud prevention strategies in the B2B sector.

§ 06 Watchlist / Forward Signals

• Future developments will signal success if businesses successfully implement continuous verification processes that maintain transaction speed and security.
• Monitoring the adoption rates of risk-based authentication technologies in the B2B space will be crucial for assessing market trends.