Don’t Wait Until It’s Too Late: How Payment Automation Protects Your Business from Fraud
The Fraud Problem No One Thinks Will Happen to Them
Many businesses believe fraud is something that happens to other companies—until they become the next victim. The reality is that payment fraud is widespread, affecting companies of all sizes and industries.
If your organization still relies on manual payment processes or lacks strong internal controls, you are at significant risk. Without clear protocols for verifying transactions and securing payment details, fraudsters can easily exploit vulnerabilities, costing businesses hundreds of thousands of dollars.
This blog explores the most common fraud tactics, real-world examples, and how automating payments with Hyphen Wallet can help safeguard your company.
The Rising Threat of Check Fraud
Check fraud is one of the most prevalent and costly forms of financial fraud. Criminals have adapted their methods, making traditional paper checks a major liability for businesses.
- Check washing scams: Criminals steal checks from mailboxes, erase the payee’s name and amount, and cash them for large sums.
Example: A Philadelphia-based electrical contracting company lost $140,000 to check washing fraud, leaving subcontractors unpaid and the business scrambling to recover.
- Mail theft: Paper checks sitting in mailboxes are prime targets for fraudsters. A Builder client had seven instances of check fraud over 4 months.
Example: In one of the instances a $190 check was stolen from the mail and turned into a $8,000 check, resulting in fraud.
Example: The client had to close their operating account three times, and because check fraud was happening so often, they switched to Hyphen Wallet to avoid any fraud in the future.
- Insider fraud: Employees with access to check payments can forge, duplicate, or divert funds for personal gain.
Key takeaway: If your business still relies on paper checks, you are exposing yourself to unnecessary risk. Do you have the internal controls in place to prevent this?
ACH Fraud Is Also on the Rise
Many companies turn to ACH (Automated Clearing House) payments as an alternative to paper checks, assuming it is safer.While ACH does eliminate check-related risks, it comes with its own set of fraud vulnerabilities.
- Business Email Compromise (BEC): Cybercriminals impersonate vendors or employees to trick businesses into updating payment details.
Example: A Minnesota contractor unknowingly wired $735,000 to a fraudulent bank account after falling victim to a BEC attack.
- Phishing attacks: Fraudsters use fake emails and malicious links to steal login credentials and bank details.
- Invoice fraud: Cybercriminals manipulate invoices to redirect payments to fraudulent accounts.
- Ghost funding schemes: Exploiting ACH’s 1-3 day processing window, fraudsters withdraw funds before banks can verify transactions.
- Internal Compliance: Many B2B companies lack proper process controls, technology, or security measures to collect, verify and store sensitive bank information.
Key takeaway: While ACH is safer than checks, it still has major risks. If you don’t have a process to verify transactions and validate payment details, your business is vulnerable.
Automating Payments for Fraud Prevention and Efficiency
So how do you protect your business? The best way to eliminate these risks is to remove manual payment processes entirely and implement secure payment automation.
How Hyphen Wallet Protects Your Business:
- Single-click payments: Eliminates the need for separate reconciliations, reducing errors and exposure to fraud.
- No more paper checks: Completely removes the risk of check fraud while cutting labor and material costs.
- Fraud mitigation: Transactions are highly secure, trackable, and safeguarded from payment interception.
- Hyphen Wallet takes on the risk for you: We manage security and compliance, reducing your liability and exposure to fraudulent activity.
- Operational efficiency: By automating payments, your AP team gets time back to focus on meaningful financial work instead of chasing down payment errors and processing manual checks.
- Turn AP into a revenue generator: Reduce payment costs while leveraging rebates to offset software expenses.
Key takeaway: Hyphen Wallet doesn’t just make payments easier—it makes them safer. If you lack internal controls or an automated process, it’s time to make a change.
Don’t Be the Next Fraud Victim—Take Action Now
Fraudsters are getting smarter, but you don’t have to wait to become their next target.
If your business still relies on manual processes, paper checks, or unsecured ACH payments, now is the time to take control of your financial security. By transitioning to an automated, secure payment platform, you can eliminate major fraud risks while improving efficiency.
Request a demo of Hyphen Wallet to see how automated payments can protect your business and give you peace of mind.
References:
[1] https://6abc.com/philadelphia-checks-stolen-usps-check-washing-postal-inspector-theft-suspects/12205339/ [2] https://www.enr.com/articles/56835-cyber-thieves-phish-away-a-735k-payment-to-a-minnesota-contractor [3] https://www.wipfli.com/-/media/wipfli/downloadable-files/cre-ra-fbi-alert-2021.pdf?rev=124641d4d7a84345bf4b71ce184bfa9c&hash=56C086B17D772653A1A1DF65966159AF
