Jul 25, 2013 Dave King
Electronic payments have become more popular among the nation's enterprises and small businesses, especially as consumers and employees prefer these mediums for transactions. However, identity theft and data breaches stemming from ACH cards and other electronic payments fraud continue to grow as well, which has been a major issue for companies of all sizes.
Businesses need to focus on implementing the most stringent information governance policies possible to minimize the risks of electronic payments fraud. Failed security protocols can lead to substantial problems, including incurred financial losses, hurt reputations, lost faith and poor employee retention rates.
Best practices to avoid fraud
The Washington Post recently suggested several ways in which small business owners can avoid electronic payment fraud, asserting that too many entrepreneurs are failing to implement adequate security structures to prevent such issues from squashing their companies. According to the news provider, retailers spend an estimated $6.5 billion on fraud prevention each year, likely because of the $3.4 billion in annual losses stemming from electronic payments fraud.
The source explained that small business owners should use credit cards as much as possible, as most major providers will offer complete protection against fraud, and should sign on any debit transactions. Additionally, companies must comply with the Payment Card Industry Data Security Standards to avoid sanctions and fines from the federal government.
The Washington Post suggested that entrepreneurs demand that their employees request CVC codes from customers who do not have their cards present, and look to obtain the most information possible for each account. As best practices continue to shift in light of advancing threats, the news provider noted that small business owners should also regularly review verification procedures and implement policies that reflect the updates.
Finally, the source added that card network authentication services can be very helpful, and can further reduce the risk of becoming victimized by fraudulent practices.
Oversight a must
Though many enterprises will implement electronic payments strategies to automate some of the more mundane aspects of accounting, oversight is still a crucial aspect of successful transaction processing. Trusted members of staff should be assigned to regularly review all accounts payable and receivable, looking to identify and eradicate any irregularities that might lead to fraud.
Taking these steps and going above and beyond the simple call of duty for payment processing security can save a company from a variety of significant problems.