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Protecting small and midsize businesses from check and payment fraud

March 30, 2009

The Association for Financial Professionals (AFP) recently released results from their 2009 AFP Payments and Fraud Control Survey which showed that payment fraud is rampant in both large and small businesses. Some key findings:

  • 63% of businesses with less than $1B in revenue experienced payment fraud
  • 91% that reporting fraud experienced check fraud  
  • The top ranked approach for mitigating loss from attempted fraud was use of positive pay features from the bank (82% who had mitigated fraud claimed to use positive pay). 

For those of you not familiar with positive pay, the general (high level) idea is that you pay your bank a fee, and then provide them a nightly list of checks that you write. The bank cross-references remitted checks with that list and validate that no manipulation or changes have occurred.

Problem is, this not only requires extra fees, but it creates a burden on a business to to manage the process with the bank. As a result, most small and mid size businesses do not purchase positive pay. 

Fortunately, Bill.com has several ways in which we protect small and mid size businesses from check and payment fraud, including:

  • All Bill.com accounts come with positive pay services as part of our standard fee. There is no extra charge to get the service and we handle all the processes with the bank. Small and mid size businesses get all of the benefits (fraud mitigation) without any of the extra fees or extra processes. Bill.com does all of the work. 
  • Furthermore, when you pay a vendor using Bill.com, you are never exposing your bank account information to anyone. Your bank account number and routing information is completely secure and hidden from all payees or anyone that might intercept the mail.  
  • Businesses are also reducing check fraud by transitioning to electronic payments. For those of you that use business online banking, you know that this is not an easy process, and is typically reserved for only the top billers (credit card companies, large institutions, utilities, etc.). Very soon, Bill.com will be introducing electronic payments so you can use our collaborative bill workflow and transition seamlessly into electronic bill payment to major vendors as well as other small and midsize businesses, all at low cost. 
Bottom line: most organizations we talk to usually are not worried about fraud unless they have experienced it in the past. Unfortunately, fraud happens. So, while we tend not to talk about it too much, it is important that our customer know how much we focus on this on your behalf and have included numerous protections as part of our standard service offering that would usually only be practical for larger businesses to implement.  
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