Not sure if digital B2B payments are more secure than paper check payments? Recent statistics prove why businesses should upgrade from manual paper check processes and automate their payments.
There’s a reason that more businesses are embracing virtual cards and other forms of digital B2B payments for their accounts payable. Security. Along with improving efficiency, automating your AP process offers many security features that paper checks cannot.
Check Fraud Isn’t Going Away
The Financial Crimes Enforcement Network (FinCEN) recently released an alert warning financial institutions about a nationwide surge in check fraud. And the first target is not the buyer or the supplier being paid but the middleman that links the two businesses. The United States Postal Service (USPS), namely their carriers and mailboxes, are the main target of check fraud criminals.
Mail carriers nationwide face criminals, sometimes armed, looking to take business checks. They are also after the arrow keys that open the blue USPS collection boxes. The criminals also use the keys to get into cluster boxes, large, grouped mailboxes typical of apartment complexes or commercial properties. They know that checks are mailed to and from business complexes. This could contribute to the increase in theft and mail carrier attacks near those locations.
Paper Checks Are the Main Target
Theft is a problem for USPS carriers. But what’s stolen can be a problem for businesses. Attacks against the USPS specifically target paper checks. There’s been a 23 percent increase in check fraud from 2020 to 2021, and the trend continued into 2022 and 2023.
Stolen checks interrupt business. The supplier waiting for payment will have to wait even longer. And the company that makes the paper check payment that gets stolen could be fined by their suppliers for late payments. Then businesses must contend with the possibility of account fraud. Checks can be washed, removing the original business name, and new fraudulent business names can be added, or the checks can be deposited into false accounts.
Criminals also use business checks for counterfeiting, where they print checks that look like legitimate versions of your bank’s checks. Considering that one of your company’s checks provides all the most valuable information – bank account number, routing number, address, phone number, and even an authorized signature – it’s obvious why checks are a prime target for committing fraud.
The fact that theft and check fraud are on the rise should give businesses that have not yet automated their payments a reason to consider making the upgrade. Ultimately, automated payments such as virtual card, ghost card, ACH, and B2B Payments Network are a lot safer than paper checks.
Security of Virtual Card Payments
There’s nothing to mail with virtual cards, so mail theft is not an issue. Even though credit cards can be lost or stolen, virtual cards cannot. Virtual cards are digital and used in place of physical credit cards. They are generated for a specific payment amount or supplier, are valid for a limited time, and can only be used once.
Because a virtual card’s “credit card number” is a 16-digit code generated for a particular purchase, no personal or business information can be seen or stolen. And the conditions set when the virtual card is generated mean that even if the numbers were somehow stolen, they couldn’t be used outside of the intended purchase.
CSI Takes Security Seriously
When you automate your B2B payments with CSI, you get a fintech partner that understands the importance of security. For example, we have the highest level of encryption for your data when transferred between locations.
CSI also achieves the highest Payment Card Industry Data Security Standard (PCI DSS) compliance. Credit card companies set PCI guidelines to help protect the cardholder’s data. As a result, payment and transaction security compliance are mandatory to protect your business’ data and ours.
We invest in independent audits to ensure we meet the Standards of Controls (SOC) for SOC 1 and SOC 2. The reports from these audits offer insightful information about our internal controls, governance, security, and risks. A SOC type 2 report evaluates the effectiveness of these controls over time. We take compliance seriously companywide and require frequent security best-practice training for every employee.
Your sensitive financial information is safe with us. Pay your suppliers with confidence, quickly, efficiently, and securely. No late check deliveries, no lost or stolen checks, and no check fraud. Stop taking a chance on USPS for your company’s payments. Digital B2B payments are all we do, and we do it securely.
To learn more about our security measures and how they protect your business, see our PCI page.
Corporate Spending Innovations (CSI) is a global FinTech leader providing innovative payment solutions to world-leading brands across all industries. CSI’s end-to-end payment solution automates and digitizes B2B payments with a safe and highly secure cloud-based payments platform. For a more efficient way to manage payables, including virtual credit card, B2B Payments Network, ACH, and check, book a demo here.
CSI is an Edenred Company, the global leader in payment solutions for the working world.